Chipmakers led a broad selloff on Thursday, 5 November, dragging the S&P 500 down 4.36% on concern that a Democratic sweep could curb the building of data centres, while Treasuries and gold rose. The fall was the S&P 500's largest since 10 April 2025, and the Nasdaq Composite dropped 5.52% at the close.

The selling began with politics and ended in the chipmakers. Technology shares fell on the prospect of curbs on new data centres after the midterm elections, and the Nasdaq entered correction territory. Faircurve's reading is that the worry runs to the spending itself, since fewer new data centres would mean fewer orders for the chips that fill them. Micron Technology (MU) fell 17.46%, its largest one-day fall in at least four years. Sandisk (SNDK), Western Digital (WDC) and Advanced Micro Devices (AMD) dropped by similar margins.

The damage spread well beyond the chipmakers. The technology fund fell 8.00%, its largest one-day fall since 16 March 2020, and only 13% of shares in the broad market rose, with every covered share counted equally. Oil rose, yet the energy producers fell with the rest of the market. That is the pattern of selling that spread outward from the AI trade, with the defensive sectors losing least.

Whether the selling has further to run is the first concern the day raises. After the earlier falls at least this large, the S&P 500 was higher a month later in 21 of 33 cases, against 66% of all sessions. So the size of the day says little about the month ahead. Where the selling sat says more. High-beta shares, the ones that move most with the market, fell behind low-beta shares by 7.17%. The most indebted companies held up better than the least indebted by 2.29%. That is the pattern of a retreat from the most volatile shares rather than fear for company finances.

The concern behind the selling is whether spending on the AI build-out will slow. The shares hit hardest were the ones that had led for a year, with the past year's leaders falling behind the past year's laggards by 3.93%. Technology's trailing P/E now stands at 29.5, in the bottom 15% of its days since June 2022. At that level the sector's price asks for less earnings growth over five years than analysts expect from its typical company next year. So the fall reads as a crowded trade being cut back, in a price that already assumes slower growth than the forecasts.

Safe assets rose on a day when nearly everything else fell. Treasury demand climbed during the technology selloff, and gold rose 0.99% to $4,113.50 an ounce. Consumer staples now stand pricier against their own history than technology does, with a trailing P/E of 32.5, in the top 2% of the sector's days since June 2022. That reads as a haven bid or as a bet on slower growth, and the sector's lead over the month favours the haven bid.

The bond rally ran against the day's economic news. Initial jobless claims fell to 189,000, below the 197,000 economists expected, which points to a firm labour market. Worker productivity grew faster than expected in the third quarter, which eased concern that the labour market is driving inflation. The two-year yield fell 12 basis points to 4.46%, and the ten-year yield fell by less. The dollar barely moved. Fed officials Barkin and Hammack said they favour gradual rate increases, and the odds on Kalshi of a hike on 9 December fell, though a hike remains the likelier outcome. On the evidence, the flight from shares did more than the data to drive the bond rally and to pull down the odds of a December hike.

Abroad, the selling followed the chip trade more than geography. Europe closed before the worst of the US session, and the DAX fell 1.68%. The Bank of England raised its rate to 4% and warned that inflation could reach almost 5% next year. Asian markets closed before New York opened, and Seoul's KOSPI slumped 5.28% while Hong Kong's Hang Seng climbed 3.67%. That split points to selling aimed at the chipmakers rather than at Asia as a whole.

Faircurve's model reads the day as a broad retreat from risk rather than a hunt for bargains. The shares the model rates cheapest fell 3.11%, a little less than the broad market. The shares the model flags as value traps held up better than the broad market by 0.90%, a bounce in the weakest names. Cisco (CSCO) reports on Wednesday 11 November, the next large technology company to show whether its own customers are pulling back.

• Cloudflare (NET) rose 13.80% in after-hours trading after its results, having fallen 8.03% in the session before them with the rest of technology. Earnings of $0.38 a share beat the $0.34 estimate.

• Airbnb (ABNB) rose 10.86% in after-hours trading after earnings of $3.16 a share beat the $2.85 estimate. Its 3.54% fall in the session came before the result.

• ConocoPhillips (COP) rose 0.55% in after-hours trading after earnings of $3.27 a share beat the $3.05 estimate, following a 1.08% fall in the session. The model's fair value sits 13.1% above the price, evidence grade high.

• Cummins (CMI) slipped 0.80% in after-hours trading after earnings of $7.71 a share missed the $8.2 estimate, following a 4.93% fall in the session. The model's fair value sits 14.0% above the price, evidence grade medium.

• Monster Beverage (MNST) fell 4.37% in after-hours trading after earnings of $0.3 a share matched the $0.3 estimate. The model's fair value sits 5.0% below the price, evidence grade medium.

Friday's October jobs report, due at 8:30 a.m. in New York, tests whether the bond rally can hold against firm labour data. Economists expect payrolls to rise by 59,000, with unemployment holding at 4.2%. Applied Materials (AMAT) reports on Thursday 12 November, with analysts expecting earnings of $4.05 a share, a direct read on whether chipmakers are still ordering equipment for the AI build-out.

Thu 5 Nov, sorted best to worst on the day, with the model’s read.

No sector rose, with communications losing least (-0.59%), and over the week communications gained 3.09% while technology fell 13.97%. The model's fair value sits 5.0% above technology's price at the median, the most value it finds in any sector.

The session’s biggest moves among large companies the model values.

The losers were chip and data-centre suppliers hit by the prospect of curbs on new data centres. The winners were steady businesses such as Costco (COST) and Republic Services (RSG), and the model's fair value sits 86.6% above Micron Technology's price, evidence grade medium.

What investors trade, read through the theme funds.

Money moved from the growth themes to the real economy. The real-economy themes led the growth themes by 5.06%, and the themes that move most with the market lagged the steadier ones, the shape of a day of cutting risk. Gold miners were the only theme to rise, up 1.37%, while semiconductors fell 11.21%. The model sees semiconductor shares 7.9% below fair value at the median, so the day's hardest-hit theme now sits among the model's cheaper ones.

Faircurve’s credit gauge: spreads implied by bond-fund prices.

CCC widening flag: Faircurve's credit gauge flags a widening in the lowest-rated tier: an implied move of about 157 bp over the last 20 sessions. The CCC-to-high-yield gap is 988 bp, wider than on 99% of days over three years.

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

Lenders are growing wary at the weakest end, and the CCC widening flag is raised on Faircurve's credit gauge, which reads spreads from bond-fund prices. A CCC-rated borrower now pays a yield near 18%, a cost that falls first on companies refinancing soon, a strain lenders are pricing before shareholders do.

Kalshi still makes a December hike the likelier outcome, but its odds fell 15 points in a session to 64%, on a day the technology selloff lifted demand for Treasuries. Friday's jobs report and speeches from Fed officials Williams, Musalem and Bowman that day could move them next, and the bills' rising path still agrees with the odds.