The Profit Margin: November 9, 2026
Statistic of the Week
The IRS announced inflation adjustments to nearly 70 tax provisions for 2027. Income tax rates will remain unchanged, but the thresholds for each bracket will rise by approximately 3.2%. The standard deduction will increase to $16,600 for single filers and $33,200 for joint filers. Separately, the cap on the state and local tax (SALT) deduction will rise to $40,804.
Global Perspective
Eurozone inflation rose to 4% in October measured year-over-year up from 3.8% in September and the highest reading since 2023, according to Eurostat’s preliminary estimate. Energy prices drove much of the increase, rising 21% from a year earlier, while core inflation held steady at 2.5%. The report strengthened expectations that the European Central Bank will raise its deposit rate by 25 basis points to 2.75% at its December meeting.
Market Moving Events
Tuesday: CPI
Thursday: Jobless Claims, Existing Home Sales
Friday: PPI
Commentary
Wednesday’s post-election rally gave way to a sharp selloff on Thursday as investors weighed corporate earnings and grew more concerned about the pace of the AI buildout. The S&P 500 and Nasdaq recovered some ground Friday after a stronger-than-expected October employment report, but all three major U.S. indices finished the week in the red. The tech-heavy Nasdaq fell 3.37%, the steepest decline of the three, and closed below its 200-day moving average.1 The S&P 500 fell 2.68%, its fourth consecutive weekly loss and its largest since April 2025.2 The DJIA held up best, declining 0.94%.3 Treasury yields rose Friday following the jobs report, but the 10-year yield ended the week at 4.86%, down 0.07% from the week prior.4
For investors watching the pace of the AI buildout, last week’s elections highlighted that local opposition could delay new data centers. Across 10 states, voters favored limits on development in 40 of the 41 local ballot measures tracked.5 Analysts estimate that pauses could delay roughly 30% of the new data center capacity expected to come online in 2028.6 Corporate earnings are tied closely to the AI buildout. Thus far, 88% of the S&P 500 companies have reported results and 84% of those have beaten analysts’ earnings-per-share estimates.7 What stands out is how narrowly they cleared the bar: in aggregate, earnings exceeded estimates by just 2.7%, well below the five-year average of 7.5%. If that figure holds, it would be the smallest earnings surprise since the fourth quarter of 2022.8
We expect volatility to persist in the week ahead, which is very light on economic releases. The CPI and PPI reports will be closely watched.
Chart of the Week
This graph shows the annual performance of the market (bars) and the largest intra-year decline (dots) since 1980. The average year sees a peak-to-trough decline of 13.5%. However, the most years post a positive returns, averaging 9% gains.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week:
Clearnomics,
Standard and Poor’s
Statistic of the Week:
MarketWatch.com
Global Perspective:
The Economist, Eurostat
Commentary:
1. Bloomberg, Investor’s Business Daily
2. Bloomberg, Investor’s Business Daily
3. Bloomberg
4. MarketWatch.com
5. Ballotopedia
6. Barron’s
7. MarketWatch.com
8. MarketWatch.com
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