Nvidia (NVDA) and Microsoft (MSFT) led the biggest technology companies higher on Tuesday, 3 November, lifting the S&P 500 0.36%, while most shares fell and analysts debated whether the AI trade has become a bubble. The gain came on a day when 37% of shares rose, and futures slipped as the midterm election results were awaited, with doubts about a near-term resolution with Iran.

Two of the companies most tied to spending on AI did the lifting. Nvidia rose 2.29% and Microsoft gained 2.74%, together carrying most of the index's gain. Technology shares rose with them, after a week in which the sector fell 6.85%. The rebound came as analysts and fund managers argued over whether the AI trade is a bubble, with AI-related debt piling up. On Faircurve's reading, the worry is that spending on AI has run ahead of what it earns, with heavy borrowing behind it.

Most of the market moved the other way. Consumer staples and materials led the sectors lower, and the Dow Jones index slipped 0.38%. Shopify (SHOP) fell 8.74%, its largest one-day fall since 5 May 2026. The sectors that fell had led the market over the past month. That fits profit-taking as well as a turn back to technology, and a single session does not separate the two.

Whether the rebound reaches beyond the AI leaders is the question the day leaves open. On the evidence, it does not yet. The broad market fell 0.33%, with every covered share counted equally, against the index's gain. High-beta shares, the ones that move most with the market, led low-beta shares by 3.07%, after trailing them by 19.03% over the past month. Rate-sensitive companies lagged companies least sensitive to rates by 3.22%, the usual pattern when yields rise.

The question behind the bubble debate is whether the price of technology shares has run ahead of its earnings. One day cannot settle it. The price of technology shares needs 11% a year of earnings growth for five years, against the 17% analysts expect from the median company next year. The price assumes less growth than analysts forecast, so the debate turns on whether those forecasts hold, and forecasts a year ahead tend to be cut. The arithmetic runs the other way in consumer staples, the day's weakest sector, whose price needs 19% a year against the 6% analysts expect.

Lenders show more strain than the stock market does. The CCC spread is the widest in three years at 1,343 basis points on Faircurve's credit gauge, which reads spreads from bond-fund prices. The high-yield spread narrowed on the day but sits 23 basis points wider on the week. Treasuries have offered little cover for shares. The correlation between the S&P 500 and long Treasuries is 0.17, against its usual -0.33, on a scale where one means in step and zero unrelated. Neither gauge settles the bubble debate, but both show strain in the weakest borrowers and little help from bonds for a holder of shares.

Treasury yields rose on a day of stronger figures on jobs and factories. The ten-year yield rose 4 basis points to 4.95%, leaving it lower on the week. The Labor Department said job openings rose to 7.52 million in September, above the 7.1 million forecast, and factory orders rose more than expected. The November fed funds future confirms today's rate. Brent crude fell to $103.60 a barrel even as Iran used guerrilla tactics to disrupt restored oil flows through the Strait of Hormuz, while West Texas crude rose slightly. Gold and copper fell.

Most overseas markets fell, Asia's before the US session opened. Seoul's KOSPI and Taiwan's TAIEX each fell 3.59%, while Hong Kong's Hang Seng rose 0.57%. Chinese regulators told banks they would take up no new share listings while current ones proceed. In Europe the FTSE 100 fell 1.14% and the STOXX 600 slipped 0.58%, and the euro rose 0.52% against the dollar.

Faircurve's model reads the day as a rally in the largest companies, not in the market. The shares the model rates cheapest fell 0.37%, in step with the broad market, and the shares it flags as value traps fell 0.64%. ARM Holdings (ARM) and Qualcomm (QCOM) report on Wednesday, the next test of whether the chipmakers' rebound has earnings behind it.

• Advanced Micro Devices (AMD) rose 5.02% in after-hours trading after earnings of $2.09 a share beat the $1.95 estimate. Its shares had gained 3.65% in the session, before the results.

• Arista Networks (ANET) rose 9.48% in after-hours trading after earnings of $1.2 a share beat the $1.08 estimate. The session's 3.52% gain came before the results.

• Apollo (APO) fell 4.95% on the day it reported earnings of $2.07 a share, short of the $2.19 estimate, and was little changed after hours. The model's fair value sits 24.0% above the price, evidence grade medium.

• Shopify (SHOP) reported earnings of $0.49 a share against the $0.46 estimate and slipped 0.93% in after-hours trading. The model's fair value sits 11.6% below its price, evidence grade medium.

• Eaton (ETN) rose 7.00% on the day it reported earnings of $3.68 a share, above the $3.54 estimate. Its shares slipped 0.69% in after-hours trading.

The ADP employment report for October comes at 8:15 a.m. on Wednesday, and the ISM services survey follows at 10 a.m. with a consensus of 54.8. Both will show whether the strength in the jobs and factory figures carries into October. ARM Holdings and Qualcomm report the same day, with analysts expecting earnings of $0.48 and $2.18 a share, a test of whether the chipmakers' rebound has support. The Bank of England decides on Thursday at 7 a.m., with a consensus of 4%.

Four of eleven sectors rose, with technology in front (+1.31%) and consumer staples last (-2.07%), a reversal of a week in which technology fell and the defensive sectors gained. The model finds the most value in technology, 5.0% below fair value at the median, and the least in real estate, 3.3% above.

The winners lean towards power equipment and computing, which Faircurve reads as suppliers to the AI build-out, while the losers span online retail, drugs, oil and telecoms. The model's fair value sits 9.7% above Oracle's price, evidence grade medium.

The growth themes led the real-economy themes by 2.88% on the day, and the high-beta themes finished ahead, a session of adding risk. Clean energy led the themes, up 2.42%, while homebuilders trailed, down 3.56%. The model's opinion runs against the leader, rating clean energy 6.8% above fair value at the median. It sees the most value among the themes in oil and gas producers, 9.9% below fair value at the median.

CCC widening flag: Faircurve's credit gauge flags a widening in the lowest-rated tier: an implied move of about 183 bp over the last 20 sessions. The CCC-to-high-yield gap is 1004 bp, wider than on every other day over three years.

The high-yield spread is in the top 23% of weeks over the past three years (high), rising for three weeks.

Faircurve's credit gauge puts the high-yield spread at about 338 basis points, high for its three years, after narrowing 5 basis points on the day. The CCC spread widened 27 basis points, with the widening flag on, and a CCC-rated borrower pays a yield near 18%. The most indebted companies lagged the least indebted by 0.77%.

The market's pricing, on Faircurve's estimate from the November fed funds future, is 3.88% for the month, today's rate. The contract's month ends before the Fed's Wednesday 9 December decision, so it carries no odds for it. Bill yields follow a rising path from 4.03% at one month to 4.40% at a year, all above the fed funds rate.