The Market in Pictures, November 6

Our team looks at a lot of research throughout the day. Here are a handful of charts we think are good summations of investor activity, from an October that punished the index while rewarding the average stock and the record de-grossing behind it, to Thursday's 70% jump in the VIX, an accelerating investment boom, earnings outrunning prices, oil and deficits pushing on yields even as sticky inflation cools, Treasuries' fading role as a hedge and the options boom taking its place, and what history says about markets after a midterm. Have a great weekend!

Derek: Part of the reason is positioning. Hedge funds cut gross exposure 7.8% from its October peak, the largest de-grossing since the data began in 2016 and bigger than 2020 or 2021.

Source: Steno Research, Morgan Stanley Prime Brokerage as of 10.27.2026

John Luke: The nervousness carried into November. Thursday's 70% jump in the VIX from 16.61 to 28.18 was the third biggest since 1990 on a percentage basis, though in points the 11.57 move ranks only 17th because it started from such a low level. The record remains March 16, 2020 at 24.86 points.

Source: CBOE as of 11.05.2026

Brad: Meanwhile, the real economy keeps spending. Real private nonresidential investment has pushed past $4 trillion at an annual rate, and the pace is accelerating rather than slowing.

Source: Bureau of Economic Analysis, @realejantoni as of Q3 2026

Brett: That spending is showing up in earnings. Forward estimates are up 32% this year against a 12% gain in the S&P 500, and that gap has pulled the P/E ratio down about 15%.

Source: FactSet as of 10.23.2026

Joseph: The pushback has come from rates. Oil near $97 has dragged the 10-year yield back toward 4.9% with the two trading almost in lockstep this year.

Source: Bloomberg as of 10.30.2026

Jake: Underneath the oil move, the stickier parts of inflation keep cooling. Sticky CPI is at 2.82% and median CPI 2.61%, with trimmed-mean PCE down to 2.26% as of September, all back within a point of the Fed's target.

Source: Baird Strategas, Federal Reserve, Macrobond as of September 2026

Mike: Washington is adding to the pressure. Federal spending reached $7.4 trillion in fiscal 2026 and net interest crossed $1 trillion for the first time, which now costs more than national defense.

Source: U.S. Department of the Treasury, Monthly Treasury Statements as of September 2026

Ten: That matters because Treasuries have not been the shock absorber they once were. Before 2020, they rallied in every S&P 500 correction shown, but since then the cushion has mostly disappeared, and in 2022 they fell alongside stocks.

Source: KKR, Bloomberg, Haver as of 03.27.2026

Brian: That is one reason hedging keeps migrating into options. Option income ETFs are approaching $230 billion in assets and buffer funds have crossed $100 billion, and we're just at the early innings of advisors learning about how custom these strategies can get.

Source: Baird Strategas, Bloomberg, ETF Action as of 10.30.2026

John Fox: With the midterms behind us, history offers some comfort. Midterm years have averaged a gain of more than 15% in the 250 trading days after Election Day against roughly 9% in presidential and pre-election years and about 3% in the year after a presidential election.

Source: GS Market Data, Prism as of 12.31.2025

Mark: The consistency is the striking part. Since 1942, the S&P 500 has gained in the six months after every midterm but one and in the year after every midterm but one, while other years are scattered on both sides of zero.

Source: Financial Times, LSEG as of 11.02.2026

JD: Whoever controls Congress has mattered far less than staying invested. A dollar in the S&P 500 in 1926 grew to $21,453 by 2025 through every configuration of Washington.

Source: Dimensional as of 12.31.2025

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