Midterms, Eurozone CPI & ISM – Daily Market Update Nov 4, 2026

Markets opened the day reacting to the US midterm elections, where early results and projections point to Democratic control of Congress. Later today, the Eurozone releases its October flash inflation at 10:00 GMT and the US publishes the ISM Services PMI at 15:00 GMT. Here is what to watch.

Today's Key Economic Events (GMT)

US Midterms: Markets Turn Cautious

Early results and projections from US media point to Democrats winning control of both the House and the Senate, a major shift in Washington. The market reaction was quick. S&P 500 futures fell by roughly 1% to 1.2% and Nasdaq futures by about 2%, European futures dropped around 1.4%, and Japan's Nikkei slid about 3% after returning from a holiday. Treasuries rallied, and the Dollar Index slipped about 0.4% to around 101.3.

According to Reuters, the sharper drop in tech futures reflects concerns that a change in political control could bring greater regulation and oversight of AI and Big Tech at a time when investors are already questioning high valuations and rising AI spending. A divided or gridlocked Congress could also complicate the fiscal picture. As the results are still being finalized, expect volatility to continue through the US session, but remember that the market impact of elections has historically faded as policy direction becomes clearer.

Eurozone Inflation: A Key Test Before the ECB's December Meeting

Euro area inflation jumped to 3.8% in September from 3.2% in August, nearly double the ECB's 2% target, while core inflation rose to 2.5% from 2.4%. For October, consensus is 4.0% and the forecast is 3.9%, which would be another step higher.

The ECB held its main rate at 2.65% last week but discussed a hike, and markets price a high chance of a 25 basis point increase in December. A reading at or above 4.0% would strengthen that case and could support the Euro, since higher rates attract investors seeking better returns. It would also add pressure on European stocks and bond prices, as higher borrowing costs weigh on companies. A softer print near 3.8% would ease some of the pressure on the ECB.

US ISM Services PMI: Prices Paid Stay High

The ISM Services PMI surveys purchasing managers at banks, hospitals, restaurants and other service firms, with readings above 50 signalling growth. September's reading fell to 54.9 from 55.4, still comfortably in expansion territory. Under the surface, business activity slowed to 56.5 from 61.7, new orders eased to 59.8, and employment improved to 50.1 from 47.8, while the prices index rose to 74.0 from 72.6, a very high level.

For October, consensus is 54.8 and the forecast 54.5. Because services are the largest part of the US economy, the report can move the Dollar, stocks and bond yields. Monday's ISM Manufacturing PMI rose to 55.5, beating forecasts, so a firm services reading would confirm a resilient economy and support expectations of a December Fed hike, while a weaker print would ease those expectations. The prices component is worth watching, since persistently high input costs keep inflation worries alive.

Market Takeaway

Risk note: This content is for informational and educational purposes only and does not constitute financial or investment advice. Forex trading involves substantial risk of loss and is not suitable for every investor. Always conduct your own research and consult a licensed financial advisor before making trading decisions. Volatility around elections and major data releases can be extreme.