Astra Series Market Commentary | November 2026
A Strong Economy, but Increasingly Uneven Markets
Strong economic growth during the third quarter provided encouraging news for investors, but it did little to calm financial markets in October. Concerns about inflation, rising interest rates, and doubts about the eventual payoff of investments in artificial intelligence led to sharp differences in performance across the major stock indexes. The Dow Jones Industrial Average gained approximately 1.5%, the S&P 500 declined 1.2% and the Nasdaq fell 5.2%. Much of the damage occurred on the final trading day of the month as earnings disappointed.[i]
Yet the broader economy continues to perform remarkably well. Third-quarter economic growth reached 3.4%, well ahead of expectations. Consumer spending increased 3.8%, despite higher energy prices and ongoing affordability concerns. Business investment was also exceptionally strong, particularly in technology, software, and data center construction, the primary areas that investors are questioning.[ii]
Corporate earnings have also been impressive, although a closer look reveals a somewhat more complex picture. Profits among S&P 500 companies are expected to increase approximately 30% from a year ago, but just two companies, Nvidia and Micron, account for roughly one-third of that growth while ten companies account for about two-thirds. Still, the remaining 490 companies (approximately) are expected to deliver earnings growth of around 10%, which is certainly respectable.[iii] This level of growth is strong enough to signal that the economy's strength extends well beyond the technology sector even if earning growth remains very concentrated.
Inflation also continues to be a challenge. Strong consumer demand, higher energy prices, and continued business investment are complicating the Federal Reserve's efforts to control inflation. Higher interest rates raise borrowing costs for businesses and consumers, while also putting pressure on stock prices. Investors are understandably becoming more cautious about paying high prices for companies whose valuations depend on substantial growth many years into the future. This is particularly relevant to technology stocks, where expectations continue to be exceptionally high.
Government finances are another growing concern. Federal debt reached approximately 100% of U.S. GDP, a level last seen in 1946.[iv] With annual deficits approaching $2 trillion, continued government borrowing will likely keep interest rates higher for longer and crowd out future private investment, which will slow economic growth. Higher interest payments also leave the government with less flexibility to deal with future economic problems. Unfortunately, neither political party has shown much willingness to seriously address the issue. At some point, government debt will cause very real problems, but it’s very difficult to guess when and what the eventual triggers may be.
This week's midterm elections add another element of uncertainty, particularly around future economic policies. Inflation, interest rates, and corporate earnings, however, will likely have a greater influence on the markets over the coming months than the election results themselves.
Despite October's uneven performance and concerns over AI’s eventual returns, there are many reasons for continued optimism. The U.S. economy is strong and corporate profitability remains very high. There may be legitimate concerns about inflation, government debt, and the ongoing wars, but we still believe the underlying strength of the economy and corporate profits provide good reasons to maintain a positive outlook for stocks.
Daniel Wildermuth
Portfolio Manager, Quartz Astra Strategies
[i] Heard on the Street Staff. “Stocks Slide, Intel Plunges, Binance Hacked.” Wall Street Journal. 2026, October 30. https://www.wsj.com/finance/investing/stocks-slide-intel-plunges-binance-hacked-83302b14?mod=WTRN_pos2
[ii] Putzier, Konrad. “U.S. Economy Accelerated This Summer Despite High Gas Prices.” Wall Street Journal. 2026, October 29. https://www.wsj.com/economy/us-gdp-report-q3-2026-87eb755d
[iii] Lang, Hannah Erin. “Two AI Chipmakers Make Up 34% of America’s Earnings Boom.” Wall Street Journal. 2026, October 24. https://www.wsj.com/finance/stocks/the-earnings-boom-is-heavily-reliant-on-just-a-handful-of-stocks-21decb53
[iv] Rubin, Richard. “Federal Debt Hits 100% of GDP.” Wall Street Journal. 2026, October 29. https://www.wsj.com/economy/federal-debt-hits-100-of-gdp-585d3cb0
DATA SOURCES
Market Data: https://www.wsj.com/market-data
INDEX DESCRIPTIONS
The Standard & Poor’s 500 Index is a capitalization-weighted index that is generally considered representative of the U.S. large capitalization market.
The NASDAQ Composite Index is a capitalization-weighted index that is comprised of all stocks listed on the National Association of Securities Dealers Automated Quotation System stock market, which includes both domestic and foreign companies.
The Dow Jones Industrial Average is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.
IMPORTANT DISCLOSURES
This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any particular security, strategy or investment product, or as investing advice of any kind. This material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. The content contained herein is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation. This material contains opinions of the author or speaker, but not necessarily those of Quartz Partners, LLC. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable but are not assured as to accuracy. There is neither representation nor warranty as to the current accuracy of nor liability for, decisions based on such information.
Past performance is not indicative of future results. No part of this material may be reproduced or referred to in any form, without express written permission of Quartz Partners, LLC.
Investment Advisory Services offered through Quartz Partners, LLC, an SEC-Registered Investment Advisor. Use of the term “registered investment adviser” or being “registered” with the SEC, or any state securities authority does not imply a certain level of skill or training.