The US midterm elections dominated the week. Democrats swept both chambers of Congress, triggering a sharp rotation out of AI and defense stocks into rate-sensitive and domestically oriented sectors. The Philadelphia Semiconductor Index fell roughly 12%, its worst week since April 2025, and the S&P 500 lost 2.99%. In Europe, the IBEX 35 stood out with a 3.52% gain, helped by its low tech exposure.
Developed-market bond yields fell broadly as investors sought safety and priced a more restrained US fiscal path. The US 10Y fell to 4.85%, and France and Japan posted the largest rallies. The Bank of England surprised with a unanimous rate hike. In LatAm, Brazil was the only curve to widen as the Copom halted its rate cuts and kept the Selic at 13.75%, while Mexico and Chile rallied alongside Treasuries.
Coming up: Brazil’s Copom minutes and inflation data, and CPI releases in Mexico, Colombia and Argentina.