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- Manufacturing activity accelerated in October while services growth moderated; input costs stayed elevated across both surveys.
- Private employers added 86,000 jobs in October, a second consecutive month of steady hiring.
- Equity markets finished the week lower despite the midterm election outcome coming into focus, with investors appearing more interested in the resolution of uncertainty than on any single result.
1. Manufacturing Accelerates as Services Growth Moderates
Both purchasing managers’ surveys arrived last week, and together they described an economy still expanding at a measured pace. The Institute for Supply Management reported that its Manufacturing PMI rose to 55.5% in October from 54.5% in September, the tenth consecutive month above the expansion threshold of 50.1 Production led the improvement, climbing 2.3 percentage points to 59.0%, and 12 industries reported growth for the month.1
Services told a slightly different story. The Services PMI eased to 54.5% from 54.9%, extending its expansion to 28 months even as business activity and new orders decelerated.2 Employment in the sector improved for a second straight month, registering 51.4%.2
Price pressures remained the common thread. The ISM Manufacturing Prices Paid Index eased to 75.2% but stayed well above the neutral level of 50, while the services prices index registered 73.0%, its seventh reading above 70% in eight months.1,2 Supplier deliveries slowed in both surveys, reflecting continued shortages in metals and memory components.1,2
2. Private Payrolls Post a Second Month of Steady Gains
Private employers added 86,000 jobs in October, according to ADP Research, marking a second consecutive month of solid hiring.3 The gains were spread across company sizes. Businesses with fewer than 50 employees added 28,000 positions. Mid-sized firms added 33,000 jobs, and the largest employers added 24,000.3
Service industries drove most of the increase. Trade, transportation, and utilities led with 39,000 jobs, education and health services followed with 28,000, and leisure and hospitality contributed 19,000.3 Goods producers added just 4,000 positions on net, as a 13,000 gain in construction was largely offset by losses of 8,000 in natural resources and mining and 1,000 in manufacturing.3
The report was not uniformly positive. Professional and business services reduced payrolls for a third consecutive month, the clearest soft spot in an otherwise solid release.3 Pay growth held steady, and ADP noted that job changers recorded their fastest earnings gains since early 2024.3 Taken together, the data point to a labor market that keeps adding workers at a moderate pace.
3. Markets Weigh the Election Calendar
Equity markets drew particular attention last week as results from Tuesday’s midterm elections came into focus. Through Friday’s close, the S&P 500 fell 2.7% and the Nasdaq Composite fell 3.4%. The 10-year Treasury yield finished near 4.51% and WTI crude ended the week trading near $90.83 per barrel.4
Election weeks tend to create more noise than lasting direction. Markets historically respond less to which party prevails than to the resolution of the uncertainty itself.5,6 Once an outcome is known, investors can price a narrower range of policy paths, and that clarity alone often supports stocks regardless of the specific result.5,6
The makeup of Congress matters mainly through what policies become likely. Divided government has historically narrowed the range of plausible policy change, which can lower the odds of large new spending measures and sweeping tax changes alike. Investors tend to read that narrowing as less uncertainty.
Several contests remained undecided as the week ended, so the full picture may take more time to settle. We would caution against drawing portfolio conclusions from early returns. Over longer horizons, economic data and corporate earnings drive returns more reliably than elections do.6
Looking Ahead
- October Consumer Price Index – Tuesday, November 10th
- Weekly Jobless Claims –Thursday, November 12th
- October Producer Price Index – Friday, November 13th
Why It Matters
In the week ahead, the focus will return to inflation. Tuesday’s consumer price report covers October and arrives against a backdrop of elevated input costs in both purchasing managers’ surveys. The question is whether those pressures reached household budgets or were absorbed further up the chain. Thursday’s jobless claims give the most current read on labor conditions and offer a weekly check on whether steady hiring has carried into November. Friday’s producer price report closes the week. It measures costs at the wholesale level, where tariff and energy effects usually appear first. Together, the three releases will shape expectations for the December policy meeting more than any single data point from last week.
For the period ending 11/6/26.
*Small-cap stocks are represented by the Russell 2000® Index. International stocks are represented by the MSCI EAFE. Bonds are represented by the Bloomberg US Aggregate Bond Index. Oil is represented by WTI Oil (West Texas Intermediate Oil), a benchmark for light, sweet crude oil and a primary measure for pricing oil contracts and futures in the U.S.
Sources
1 Institute for Supply Management, Manufacturing PMI Report On Business, October 2026, November 2, 2026
2 Institute for Supply Management, Services PMI Report On Business, October 2026, November 4, 2026
3 ADP Research Institute, ADP National Employment Report, October 2026, November 4, 2026
4 Bloomberg as of November 6, 2026 market close
5 Federal Reserve Bank of St. Louis, What Happens to Expected Stock Volatility around Election Day?, On the Economy, December 2, 2024
6 Capital Group, How Elections Move Markets in 5 Charts, September 17, 2020
Disclosures
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Any opinions expressed here are those of the authors, and such statements or opinions do not necessarily represent the opinions of Cary Street Partners. These are statements of judgment as of a certain date and are subject to future change without notice. Future predictions are subject to certain risks and uncertainties, which could cause actual results to differ from those currently anticipated or projected.
These materials are furnished for informational and illustrative purposes only, to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. Materials have been compiled from sources believed to be reliable; however, Cary Street Partners does not guarantee the accuracy or completeness of the information presented. Such information is not intended to be complete or to constitute all the information necessary to evaluate adequately the consequences of investing in any securities, financial instruments, or strategies described herein. Nothing contained herein should be considered a solicitation to purchase or sell any specific securities or investment-related services.
Cary Street Partners is a broker-dealer and registered investment adviser and does not provide tax or legal advice; no one should act upon any tax or legal information herein without consulting a tax professional or an attorney.
We undertake no duty or obligation to publicly update or revise the information contained in these materials. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of securities, or information about the market, as indicative of future results.
It should not be assumed that any of the securities transactions or holdings discussed were, or will prove to be, profitable.
Additional Disclosures: International and Foreign Securities, Fixed Income Investments, the Consumer Price Index, the Producer Price Index
Comparative Index Descriptions: The Standard & Poor’s (S&P) 500 Index, The Russell 2000® Index, The NASDAQ Composite Index, The MSCI EAFE Index, Dow Jones Industrial Average® (Dow Jones or DJIA), The Bloomberg Barclays US Aggregate Bond Index (US Agg Bond), The CBOE Volatility Index (VIX). CSP2026001_45
