Global Market Pulse, Tuesday, 3 November 2026
Doubts over AI demand pull technology shares lower as most of the market rises
By Faircurve Research
Global cross-asset daily · covering the US session of Mon 2 Nov
Doubts over AI demand pull technology shares lower as most of the market rises
Doubts about lasting demand for AI sent technology shares lower on Monday, leaving the S&P 500 down 0.51%, while 69% of shares rose and oil fell on hopes for peace talks between the US and Iran.
The selling sat in the companies most tied to spending on AI. Oracle (ORCL) fell 8.85%, Intel (INTC) 8.80% and Advanced Micro Devices (AMD) 7.52%. The index fell mostly because of its biggest technology companies. Microsoft (MSFT) fell 2.83%, and Apple (AAPL) slipped ahead of its results after the close. The worry is that demand for AI may not last, though some analysts see a rebound ahead.
Energy shares fell with oil, and the gains came in companies far from the AI trade. Brent crude fell 8.03% to $104.32 a barrel as renewed diplomatic efforts between the US and Iran eased worries about Middle East supply. Aircraft-parts and building-materials makers topped the winners, and consumer companies led the sectors. Howmet Aerospace (HWM) rose 6.90%, its largest one-day gain since 9 April 2025.
Is the selling spreading beyond technology? On the evidence, it is not. The broad market rose 0.98%, with every covered share counted equally, while the index fell. Over the past month the broad market has gained 3.88% while the S&P 500 lost 2.35%. That is the pattern of a rotation, not a sell-off. The past year's leaders trailed the past year's laggards by 4.31%, which points to profit-taking or a change of leadership, and one day cannot tell which.
The Index Has Beaten the Broad Market by 0.7 Points Over Three Months
Cumulative price return since 3 August. Since then the index is ahead of the broad market by 0.7 points.
Source: Faircurve, from the session closes in its own archive
Did the doubt about AI reach lenders? Only at the margin. The high-yield spread widened 5 basis points to about 343 basis points on Faircurve's credit gauge, which reads spreads from bond-fund prices. The most indebted companies held up better than the least indebted by 1.15%, which shows no credit worry in shares. The VIX rose 1.73 points to 21.15, an options market pricing somewhat more movement. None of it settles whether spending on AI is slowing, which only the companies' own forecasts can.
Does the rotation say the economy is holding up? The factory surveys gave mixed answers. Cyclical sectors beat the defensive ones by 1.19%, the pattern of a market expecting growth to hold. The ISM manufacturing index rose to 55.5 in October, above the 54.6 forecast. S&P Global's factory survey came in at 54.9 against 56, and construction spending fell sharply in September. Surveys that disagree cannot settle the question.
Longer-dated Treasuries gained while the two-year yield edged up. The ten-year yield fell 3 basis points to 4.91%. Rate-sensitive companies beat the companies least sensitive to rates by 5.47%, the usual pattern when yields fall. Fed funds futures price a 78% chance of a rate rise at the Fed's 9 December decision. The dollar slipped.
Europe ended higher on a day of weak German data. The STOXX 600 rose 0.42% even as German retail sales fell 2% in September against a forecast of a 0.4% rise. In Asia, which closed before the US data, the KOSPI rose 2.24% and the Shanghai Composite 1.08%. China's central bank is bolstering its tools for buying shares.
Faircurve's model reads the day as a junk rally inside a rotation. The shares the model flags as value traps rose 2.81%, ahead of the broad market, while the shares the model rates cheapest trailed it. Whether rotation or retreat, the Advanced Micro Devices forecast on Tuesday and the ISM services index on Wednesday are the next evidence.
The ten-year Treasury yield below 4.86% by Friday 6 November 2026 close, from 4.91% at the close on Monday, 2 November 2026. Wrong if the ten-year closes at or above 4.86% on Friday.
Apple (AAPL) fell 2.66% in after-hours trading after earnings of $2.05 a share beat the $1.99 estimate. IDC data showed iPhone shipments fell only 4% in the third calendar quarter as the smartphone market declined 21%.
Palantir Technologies (PLTR) fell 2.93% in after-hours trading after earnings of $0.44 a share beat the $0.41 estimate, following a 3.13% fall in the session before the results. The model's fair value sits 9.5% below the price, evidence grade medium.
Diamondback Energy (FANG) fell 5.82% in the session with oil, before results showing earnings of $5.86 a share against the $5.72 estimate. The model's fair value sits 6.3% above the price, evidence grade high.
IDEXX Laboratories (IDXX) rose 21.85% as earnings of $3.96 a share beat the $3.73 estimate. The model's fair value sits 13.9% below the price, evidence grade high.
Estée Lauder (EL) fell 4.08% in the session and slipped 0.25% in after-hours trading. Its reported earnings carried a one-off, and revenue came in close to the estimate.
Tuesday's midterm elections arrive with prediction-market traders putting the chance of a Democratic Senate at 74%, and strategists say the vote could remove some uncertainty from the market. Advanced Micro Devices reports on Tuesday, with analysts expecting earnings of $1.90 a share, and ARM Holdings and Qualcomm follow on Wednesday. The ISM services index at 10 a.m. on Wednesday is expected at 54.8, a test of whether factory strength reaches services. The Bank of England decides on Thursday, with a rise to 4% expected.
i.In Faircurve’s Figures
| Sector | 1D | 1W | 1M | YTD | Beta | Price vs fair value | Below fair value | |
|---|---|---|---|---|---|---|---|---|
| Consumer DiscretionaryXLY | +2.41% | +3.41% | +7.01% | -1.05% | 0.94 | 1.4% below | 53% | |
| FinancialsXLF | +1.86% | +2.75% | +6.83% | +5.09% | 0.42 | 1.7% above | 45% | |
| MaterialsXLB | +1.76% | +4.46% | +8.42% | +18.35% | 0.27 | 1.4% above | 45% | |
| Consumer StaplesXLP | +1.58% | +3.26% | +12.08% | +16.93% | -0.40 | 2.1% below | 64% | |
| IndustrialsXLI | +1.38% | +1.65% | -0.23% | +9.41% | 0.73 | 1.4% below | 57% | |
| Real EstateXLRE | +1.09% | +1.96% | +7.30% | +8.15% | 0.27 | 3.3% above | 46% | |
| UtilitiesXLU | +0.55% | +2.63% | +9.26% | +2.30% | 0.03 | 0.6% below | 52% | |
| CommunicationsXLC | +0.36% | -3.46% | -10.17% | -14.83% | 0.80 | 0.7% above | 43% | |
| Health CareXLV | -0.15% | +2.97% | +10.29% | +19.25% | 0.10 | 2.0% below | 60% | |
| TechnologyXLK | -2.95% | -6.49% | -13.29% | +21.01% | 1.96 | 5.0% below | 63% | |
| EnergyXLE | -3.96% | -3.43% | +5.99% | +50.41% | -0.66 | 4.2% below | 63% |
Eight of 11 sectors rose, led by consumer discretionary (+2.41%), while energy (-3.96%) trailed as oil fell. In the model's opinion, technology holds the most value, with its shares 5.0% below fair value at the median.
| Company | Move | Price vs fair value | Evidence | |
|---|---|---|---|---|
| Howmet AerospaceHWM | +6.90% | 11.2% above | medium | |
| CRHCRH | +6.36% | 5.8% below | medium | |
| DoorDashDASH | +6.19% | 0.8% above | medium | |
| Sherwin-WilliamsSHW | +5.94% | 10.2% above | high | |
| TransDigm GroupTDG | +5.83% | 0.3% below | medium | |
| Western DigitalWDC | -7.52% | 5.5% below | medium | |
| Advanced Micro DevicesAMD | -7.52% | 6.0% above | medium | |
| DatadogDDOG | -8.15% | 4.0% above | medium | |
| IntelINTC | -8.80% | 11.8% below | medium | |
| OracleORCL | -8.85% | 16.2% below | medium |
The losers shared the AI trade, with Datadog (DDOG) and Western Digital (WDC) beside the chipmakers, and Intel is down 33.71% on the week. The model's fair value sits 16.2% above Oracle's price, evidence grade medium.
Money left the growth themes for the real economy. The real-economy themes led the growth themes by 5.60%, with homebuilders up 4.56%. The low-beta themes, the ones that move least with the market, led, a day of cutting risk. Oil and gas producers fell 5.01% with crude, the weakest of the themes. Semiconductors fell with the rest of the AI trade, and the model sees semiconductor shares 7.9% below fair value at the median.
The CCC spread at 1,318 bp is wider than on 99% of days in three years; high yield at 343 bp is wider than on 85% of days
Spreads over Treasuries in basis points, three years to 2 Nov.
Source: Faircurve's credit gauge, spreads implied by bond-fund prices; estimates
| Tier | Spread (bp) | 1D | 1W | 1M | YTD |
|---|---|---|---|---|---|
| Investment grade | 92 | +2 bp | +5 bp | +10 bp | +10 bp |
| High yield (junk bonds) | 343 | +5 bp | +10 bp | +48 bp | +47 bp |
| CCC-rated and lower | 1318 | -2 bp | -7 bp | +136 bp | +402 bp |
CCC widening flag: Faircurve's credit gauge flags a widening in the lowest-rated tier: an implied move of about 136 bp over the last 20 sessions. The CCC-to-high-yield gap is 975 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.
The high-yield spread sits in the top 23% of weeks of the past three years, 10 basis points wider on the week and 48 over 20 sessions. After readings this high, it widened a week later in 11 of 31 cases, against 46% of all weeks. CCC-rated borrowers pay a yield near 18%, and the CCC widening flag is on.
The January 2027 fed funds futures contract prices an average rate of 4.075% for its month, taking the 4 days after the Wednesday 27 January decision at the same rate, against the effective fed funds rate of 3.88% (30 Oct): on Wednesday 9 December, a 78% chance of a quarter-point hike and 22% of a hold, no cut priced, by Faircurve's estimate from the contract's price, the market's pricing and not a forecast. Treasury bills yield 4.05% at one month, 4.21% at three months, 4.25% at six months and 4.38% at a year, against the effective fed funds rate of 3.88% (30 Oct): a rising path.
The January 2027 fed funds future prices a 22% chance that the Fed holds in December and a rate of 4.075% after the decision. That is the market's pricing and Faircurve's estimate. Bill yields climb from 4.05% at one month to 4.38% at a year, against 3.88% effective fed funds, a rising path.
ii.The Tables
US indices, global markets and currencies| Index | Close (Mon) | 1D | 1W | YTD |
|---|---|---|---|---|
| S&P 500 ^GSPC | 7,541 | -0.51% | -1.76% | +10.17% |
| Nasdaq Composite ^IXIC | 25,164 | -1.07% | -3.84% | +8.27% |
| Dow Jones ^DJI | 51,984 | +0.41% | -0.72% | +8.16% |
| Russell 2000 ^RUT | 2,806 | -0.21% | +0.70% | +13.05% |
| Index | 1D | 1W | YTD | In dollars vs S&P 500, 1M |
|---|---|---|---|---|
| STOXX 600 ^STOXX | +0.42% | +1.37% | +9.56% | |
| FTSE 100 ^FTSE | +0.29% | -0.06% | +8.36% | +6.29% |
| DAX ^GDAXI | +0.43% | +2.06% | +5.72% | +4.36% |
| CAC 40 ^FCHI | +0.98% | +2.55% | -1.25% | |
| Nikkei 225 ^N225 | -0.33% | +1.43% | +25.31% | -3.87% |
| KOSPI ^KS11 | +2.24% | +7.12% | +39.03% | -18.70% |
| TAIEX ^TWII | -0.65% | -2.44% | +55.09% | |
| Hang Seng ^HSI | +0.42% | +0.78% | -8.73% | |
| Shanghai Composite 000001.SS | +1.08% | -1.61% | -8.34% | +2.34% |
| Straits Times ^STI | -1.36% | -2.07% | +14.15% | -5.85% |
| Currency | Rate | 1D | 1W | YTD |
|---|---|---|---|---|
| Euro EURUSD | 1.1188 | +0.11% | +0.12% | -4.75% |
| Pound GBPUSD | 1.3406 | +0.12% | +0.49% | -0.37% |
| Yen USDJPY | 157.9030 | +0.02% | -0.26% | -0.67% |
| Yuan (offshore) USDCNH | 6.6473 | -0.02% | +0.30% | +4.72% |
| Singapore dollar USDSGD | 1.2793 | 0.00% | +0.13% | +0.50% |
| Theme | 1D | 1W | 1M | YTD | Beta | Price vs fair value | Below fair value | |
|---|---|---|---|---|---|---|---|---|
| HomebuildersITB | +4.56% | +7.90% | +13.31% | +0.70% | 0.32 | 2.6% above | 39% | |
| Medical devicesIHI | +3.52% | +2.67% | +9.54% | -9.07% | 0.17 | 0.3% below | 55% | |
| Clean energyICLN | +2.74% | +1.16% | -9.02% | -4.26% | 1.32 | 6.8% above | 25% | |
| Gold minersGDX | +2.67% | -2.31% | -9.46% | -7.72% | 2.27 | 4.4% above | 0% | |
| Regional banksKRE | +2.39% | +1.37% | +4.74% | +13.76% | 0.20 | 5.7% above | 33% | |
| Aerospace and defenceITA | +2.36% | +3.63% | +3.72% | 0.00% | 0.56 | 0.5% below | 56% | |
| RetailXRT | +2.05% | +3.57% | +9.19% | +6.16% | 0.32 | 2.8% below | 58% | |
| TransportIYT | +1.80% | +2.95% | +4.05% | +11.50% | 0.39 | 2.7% below | 60% | |
| SoftwareIGV | -2.29% | -8.52% | -7.13% | -3.59% | 1.89 | 6.7% below | 69% | |
| Quantum computingQTUM | -2.35% | -5.65% | -16.45% | +19.17% | 2.35 | 2.7% below | 65% | |
| UraniumURA | -2.37% | -4.16% | -18.06% | -22.93% | 2.75 | not covered | ||
| BiotechXBI | -2.52% | +1.05% | -2.65% | +24.70% | 1.21 | 2.5% below | 66% | |
| SemiconductorsSMH | -2.71% | -6.15% | -19.81% | +41.15% | 2.54 | 7.9% below | 67% | |
| CybersecurityCIBR | -4.24% | -10.77% | -8.74% | +35.41% | 1.81 | 0.6% below | 57% | |
| Oil and gas producersXOP | -5.01% | -5.52% | +3.27% | +53.30% | -0.52 | 9.9% below | 66% |
| Contract | Latest | 1D | 1W | YTD |
|---|---|---|---|---|
| Gold GCUSD | 3,969.60 | +1.81% | -1.70% | -8.56% |
| Silver SIUSD | 50.89 | +3.27% | -6.35% | -27.92% |
| Copper HGUSD | 6.568 | +1.32% | +0.39% | +15.58% |
| WTI crude CLUSD | 96.46 | -7.36% | -5.21% | +67.99% |
| Brent crude BZUSD | 104.32 | -8.03% | -9.92% | +71.44% |
| Natural gas NGUSD | 2.856 | -1.45% | +9.76% | -22.52% |
| Asset | Latest | 1D | 1W | YTD |
|---|---|---|---|---|
| Bitcoin BTCUSD | 76,638 | -2.04% | -4.21% | -12.41% |
| Ethereum ETHUSD | 2,247 | -1.12% | -3.17% | -24.27% |
| Solana SOLUSD | 91.68 | -2.87% | -9.01% | -26.33% |
| Company | EPS | Estimate | Surprise | Session | After hours | Price vs fair value |
|---|---|---|---|---|---|---|
| AAPL | 2.05 | 1.99 | +3.02% | -1.83% | -2.66% | 20.4% above HIGH |
| PLTR | 0.44 | 0.41 | +8.35% | -3.13% | -2.93% | 9.5% above MED |
| VRTX | 4.76 | 4.82 | -1.24% | -1.03% | +0.68% | 3.9% above MED |
| MAR | 3.02 | 2.84 | +6.34% | +4.26% | +0.31% | 9.1% above MED |
| WMB | 0.54 | 0.54 | +0.19% | -4.25% | +0.24% | 19.9% above HIGH |
| LITE | 4.57 | 4.22 | +8.29% | -18.59% | +1.50% | 13.4% above LOW |
| FANG | 5.86 | 5.72 | +2.45% | -5.82% | +0.13% | 6.3% below HIGH |
| O | 0.43 | 0.41 | +5.70% | +1.14% | -0.23% | 1.8% below LOW |
| ETR | 1.98 | 1.73 | +14.45% | -0.22% | 0.00% | 16.4% above HIGH |
| IDXX | 3.96 | 3.73 | +6.17% | +21.85% | +0.37% | 13.9% above HIGH |
| EL | 0.72 | 0.51 | basis differs | -4.08% | -0.25% | 0.5% above MED |
| PEG | 1.15 | 1.19 | -3.36% | +0.11% | +0.02% | 1.1% below LOW |
The model's fair value on the names in this note
From the valuations of 31 Oct 2026, against each stock's last close. The verdict is the model's opinion on value, stated as such.
- Sherwin-Williams (SHW): fair value $316.43, 10.2% below the last close of $352.37. Fairly valued.
- IDEXX Laboratories (IDXX): fair value $475.57, 29.2% below the last close of $671.64. Overvalued.
- Datadog (DDOG): fair value $207.64, 3.9% below the last close of $216.10. Fairly valued.
- Apple (AAPL): fair value $274.19, 19.0% below the last close of $338.32. Overvalued.
- DoorDash (DASH): fair value $188.46, 0.8% below the last close of $190.07. Fairly valued.
- Palantir Technologies (PLTR): fair value $166.53, 6.6% below the last close of $178.34. Fairly valued.