Capstone Investments – Nov 11 2026

By Bryce Pease CFP® Accredited Investment Fiduciary® Casey Morris CFP® Capstone Pacific Investment Strategies, Inc. California, Colorado, Nebraska

Imagine you are coaching a football team.  Your quarterback is a superstar, both at running and throwing the ball.  Nearly all your touchdowns come as a result of his play.  Now imagine what would happen if he went down injured.  What would that do to your offense?

That’s AI (Artificial Intelligence) for the markets.  However, in recent months, there have been more and more calls coming out of Washington to regulate AI. There are a variety of reasons for this, including cybersecurity concerns, ethics, electricity prices, the environment, etc. These regulations, if enacted, would cover both the companies that create AI (the models and platforms that people interact with) and the companies that provide AI infrastructure.  Specifically, companies that provide semi-conductors or that build the large data centers needed to provide the computing power to run AI.  These are the AI-adjacent companies we referred to earlier.

A famous soccer player — well, famous in Europe, anyway — named Johan Cruyff once said, “Every disadvantage has its advantage.” ¹  That bit of wordplay could describe the  markets these past few days.  On last Wednesday, the day after the midterm elections, the markets enjoyed their best day of the year, with the Dow rising over 1500 points.²  That’s not a surprise; putting the midterms in the rear-view mirror brings clarity for investors, and clarity is caffeine for the markets.  But the very next day, the markets handed it all back, and then some.  The Dow dropped 3.4%, while the Nasdaq fell more than 5.5%, officially entering a correction.  (A drop of 10% or more from a recent peak.)  When the dust settled, the sell-off totaled nearly $3 trillion.³

Strange as it may seem, this wasn’t a big surprise for many people either.  But as dramatic as days like Thursday can be, however, short-term swings in the market are simply not as important as the factors that caused them.  So, in this message, let’s start to cover what some of those factors are, why they matter…but also why they can also be an advantage in the long-term.  

We believe the primary reason for Thursday’s volatility comes from the aftermath of the midterm elections.  Now, at first glance, that may seem confusing because of what we mentioned above about clarity.  In this case, though, that same clarity led to a sudden spasm of fear.  Fear of what the elections might mean for AI-related stocks.  More on this next time.

Casey and Bryce

626-915-7006 or

402-207-5383

www.capstonepacificinc.com

1 “Every disadvantage has its advantage,” https://ericmartinruiz.medium.com/five-johan-cruyff-quotes-on-soccer-and-life-a20705ec4155

2 “Dow soars 1,500 for best day since April 2025,” www.cnbc.com/2026/11/03/stock-market-today-live-updates.html

3 “Nasdaq posts biggest daily drop in 19 months,” www.reuters.com/business/sp-500-futures-steady-after-midterm-rally-nasdaq-lags-chip-weakness-2026-11-05/

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