Trumped Floored, Nasdaq Gored and Rates Soared

A big news week as the mid-terms provided a harsh mirror for Trump, the Bank of England raised rates to 4% and, in the midst of the AI-bloodbath, Anthropic get close to firing the starting pistol on this most anticipated stock market listing.

The Nasdaq Gored

This was one of those weeks where it doesn’t do to log on to your investment accounts. Markets reacted to the mid-term Trump Dump and the tech-heavy Nasdaq index fell by over 5% on Thursday. Key detractors included Nvidia, which lost 9%, pretty much wiping out its gains for 2026. Chipmakers AMD and Micron fell by over 15%. Ouch! 

Why? The Democrats are more likely to curb data centre expansion and rain on the AI parade. A lot of the planned data centre activity was in Texas and markets fear that Democrat Hinojosa will not entertain the growth baked into some valuation assumptions.

Worry about AI stocks has been a standout theme of the year. Next Thursday, I’m really looking forward to hosting a webinar with Baillie Gifford’s Investment Specialist Richie Vernon, to discuss this and ask where alternative growth might lie. Last call to join live or watch on catch-up.

Rates Soared

Closer to home, we saw the first interest rate hike in three years. Up to 4%. Inflation remains high and the Bank of England is juggling that most difficult of tasks – preventing inflation from running out of control whilst not smothering the economy at the same time. 

If you're one of the 2.3 million households coming off a fixed rate mortgage in 2027, I would consider getting a quote now. Most will last for 6 months with no obligation to use. According to Moneyfacts, the best 2-year fix today is 4.9% and I don’t see things coming down any time soon.

The general consensus is that interest rates will rise again to 4.25% in either December or (more likely) February, so it’s worth getting the house in order now and just locking in some options.

If you’re sitting on lots of cash savings, then whoopee BUT remember last week’s Budget. The Chancellor hoiked up the tax we pay on interest from cash savings by an additional 4% from next April. And you told us that this was the thing in the Budget which irritated you the most. Also unpopular was the £100 energy payment for lower council tax bands which was felt to be a bit pointless, although leaving Cash ISAs alone got the thumbs-up.

The message here is clear. Use the Cash ISA shelter where possible – we can put up to £20,000 every year in Cash ISAs, Shares ISAs or a mix of both. And if you’re a higher rate taxpayer with lots of cash savings, consider the largely tax-free gilts or UK Government bonds. You could also consider tax-effective premium bonds, but I’m not a fan of these myself.

And Enter Claude 

Roll up, roll up for the IPO of the season. Anthropic’s Initial Public Offer is stirring and soon we will be able to buy shares in this powerful company (unless this week’s wobbles delay things). The details, including the price, are still to be revealed, but it’s estimated this will happen between 16th and 25th November. Whatever the price, this will be popular across the world with consumers, in the same way that SpaceX was. Arguably more so, as the firm’s CEO is not such a controversial figure as Musk.

If you’re interested and want to explore your options, then have an account opened with a participating broker and make sure you have completed a W-8BEN form in advance – this is basically a tax form which lets Brits buy shares in the US. According to Anthropic, Hargreaves Lansdown, interactive investor, AJ Bell, eToro, Interactive Brokers and Revolut are the confirmed UK brokers – this list may be updated.

More on this next week, I suspect.

Meanwhile, I’ll leave you with a sobering thought from the 94-page long Risks section of Anthropic’s documentation filed so far. “... with the scale of harm that could result from a catastrophic AI-related incident, no single insurer, and potentially the insurance industry in the aggregate, may have sufficient capacity or expertise to underwrite insurance commensurate with such exposure.” 

Wow. Gulp. Begging the question, I find myself asking more and more these days. Where are the grown-ups in charge, please, who make us feel that it’s all going to be OK? The only thing to do is to go and jump in the sea – it’s impossible to worry about anything other than your extremities in 13-degree water!

Holly