October ends with a tech sell-off; Monday's test is whether Apple can stem the bleeding

October ends with a tech sell-off; Monday's test is whether Apple can stem the bleeding
US equities evening brief | Saturday, 31 October 2026 (Hong Kong time; the cash market closed on Friday, 30 October, US Eastern time; US stocks are closed on Saturday and stock-index futures have yet to open, so this edition is anchored to Friday's close and weekend news)

On Friday, the S&P 500 fell 1.82% to 7580.07 points, the Dow fell 1.09% to 51770.31 points, the Nasdaq fell 2.86% to 25437.00 points, and the equal-weight S&P ETF (RSP) fell 0.79% to 218.31 dollars (The Wall Street Journal). The 10-year US Treasury yield was about 4.93%, WTI crude about 104.12 dollars per barrel, gold futures about 3885.70 dollars per ounce, and the dollar index was broadly flat at about 101.9 (The Wall Street Journal) (Reuters). No new premarket or futures quotes were available for verification on Saturday evening; the next cash trading session is on Monday evening Hong Kong time.

Market theme
There was no new weekend trading to “disprove” Friday's sell-off, but weekend news pushed the same theme a step further: The market is no longer punishing growth for being too slow, but spending for being too high and the recovery of cash for being too slow—the Nasdaq fell 2.86% on Friday and was down 7.8% from its 6 October closing high; the Nasdaq 100 fell 3.5% in a day, approaching correction territory, while the S&P 500 fell only 1.82% and the Dow still rose for the month. This suggests the reckoning remains concentrated within technology stocks, rather than being a market-wide capitulation. China's official manufacturing PMI slipped into contraction territory on Saturday morning, adding a further backdrop of unhelpful demand ahead of Monday's open; the Financial Times report that OpenAI had lowered its funding target spread the question of whether external financing can keep covering the “AI bill” from listed-company earnings to unlisted AI laboratories (Reuters) (Financial Times, republished). Monday's test is therefore clear: will after-hours results from Apple and Palantir arrest the sell-off, or extend the “cash-flow reckoning” to the last names yet to report?

I. Friday's close and Europe: US stocks fall unevenly; European losses are limited but shares also close below their monthly highs

• European shares also suffered from the AI sell-off on Friday, but fell far less than US stocks: the pan-European STOXX 600 fell 0.36% to 646.75 points, Germany's DAX fell 0.85% to 25818.21 points, the eurozone STOXX 50 fell 1.23% to 6131.31 points, Britain's FTSE 100 instead rose 0.07%, and France's CAC 40 was broadly flat. Despite Friday's decline, the STOXX 600 recorded its best month since June (Reuters, republished). European technology stocks fell 2.75%, their worst day since 7 July; AT&S, Soitec and Technoprobe fell between 9% and 13%, while Universal Music rose 7.89% on a recovery in third-quarter subscription streaming revenue, topping the STOXX 600 gainers (Reuters, republished). Europe's smaller losses show that Friday was not about the global economy failing, but about the AI bill bearing first on US technology stocks; Europe was largely following the decline rather than facing a local problem.
• The monthly divergence was set: the Nasdaq fell 5.3% in October, its largest monthly drop since March 2025, and was down 7.8% from its 6 October closing high; the S&P 500 fell 0.9% for the month and the Dow rose 1.7%; for the week, the Nasdaq fell about 2%, while the S&P 500 and Dow fell 0.9% and 0.6%, respectively (The Wall Street Journal) (Barron's). Reuters noted that the four largest hyperscalers accounted for more than one-third of total S&P 500 constituent capital spending over the past 12 months, and their share could rise further (Reuters). The monthly divergence is October's most important legacy for November: resilience remains at the index level, but the cash-flow stratification within technology stocks is already irreversible.
• China's Saturday morning data was the weekend's first hard news: the official manufacturing PMI fell from 50.1 in September to 49.3 in October, below the 50.0 expected in a Reuters poll and marking the fastest contraction in three months. Reuters said weak demand, including export demand, weighed on manufacturers (Reuters). The data alone does not determine the US market open, but it closes off the comforting explanation that Chinese demand will provide a floor for the global technology supply chain, leaving the market less room for error ahead of Monday's open.

II. Bonds, the dollar and commodities: Treasuries end a strong month as oil and gold move in opposite directions

• Friday's bond-market signal was clearer than the stock market's: the 10-year US Treasury yield fell 6 basis points to 4.928%, the 2-year yield fell 7.5 basis points to 4.579%, and the 10-year yield fell about 37 basis points over October, putting it on course for its largest monthly decline since December 2023. The Wall Street Journal said haven buying offset inflation concerns arising from oil's return above 100 dollars (The Wall Street Journal). The dollar index was broadly flat for the week, as haven demand and repricing after the Federal Reserve held rates steady offset each other (The Wall Street Journal).
• Oil prices continued to rise: December Brent crude futures gained 2.4% to 117.64 dollars per barrel, touching 118 dollars intraday; WTI rose 2.08% to 104.12 dollars per barrel. Brent gained 13.6% and WTI 15.2% in October (Reuters). Reuters reported on Friday that a tanker continued sailing after being hit by mines in the Strait of Hormuz and suffering an engine-room fire, the first successful use of mines in an attack since the US-Iran conflict began in February. Iran's Revolutionary Guards navy said the same day that two tankers had been intercepted in waters south of the Strait of Hormuz for ignoring radio warnings, while US Central Command said the main shipping lane had been cleared and vessels could transit freely; both accounts currently stand (Reuters). Oil is rising because of supply risk, not demand—and that is what makes it so difficult to manage: the higher oil goes, the harder it is to rule out a rate increase in December, and the more vulnerable haven buying in bonds appears.
• Gold and silver both fell sharply on the same day: spot gold fell 3.5% to about 3881 dollars per ounce, its lowest since October 2025; silver fell about 6% and slipped below 50 dollars per ounce (Reuters). Gold and US Treasuries falling on the same day broke the simple script of buying gold for safety: when inflation expectations and selling appear together, gold is sold first as a source of liquidity rather than treated as a haven.

III. Individual stocks and sectors, including earnings: chip stocks lead declines while energy stocks provide support

• Intel plunged 28.6% to 65.76 dollars, its biggest one-day decline since 1974, because its fourth-quarter revenue guidance fell far short of market expectations; the company also attributed the outlook to continued weakness in the PC market. Reuters added that Intel expected fourth-quarter revenue of 15 billion to 16 billion dollars, below the average analyst estimate of 17.07 billion dollars, and its chief financial officer said it would not achieve positive cash flow this year (The Wall Street Journal) (Reuters). Intel's plunge best illustrates this week's logic: current-quarter numbers were not bad, but weak guidance drew a severe punishment. The market now pays only for a company's willingness to make commitments for the next quarter.
• Chip stocks fell across the board: Nvidia dropped 4.2%, AMD fell 10.9%, and the Philadelphia Semiconductor Index lost 7.2%. Reddit plunged 29.2% to 91.73 dollars, its biggest one-day decline since listing, because its fourth-quarter revenue guidance missed Wall Street expectations; Microsoft, Meta, Amazon and Alphabet also each fell between 1% and 2% on Friday (The Wall Street Journal). Amazon closed down only 1.4% at 240.35 dollars, substantially narrowing its premarket loss of about 7% (The Wall Street Journal). Amazon's narrowing loss alongside Intel's plunge draws the dividing line: cloud growth is still believed, but no company can use a growth story to escape scrutiny of its cash flow.
• Energy and value stocks remained on the opposing side: ExxonMobil and Chevron both reported better-than-expected third-quarter profits and rose 2.2% and 2.8%, respectively. Financial stocks were dragged lower, with Goldman Sachs down 4% and Jefferies down 6%; cryptocurrencies also came under pressure, with Coinbase falling 11% to 143.54 dollars and bitcoin falling 1.8% to 76353 dollars, after a report that hackers had stolen more than 6.3 billion dollars from Binance (The Wall Street Journal). The combination of rising energy and falling financials is a reminder that Friday was not a simple switch in risk appetite, but a reordering of capital among oil prices, interest rates and the AI bill.
• The first test for next Monday is already set: ahead of Palantir's after-hours results on Monday, a JPMorgan analyst initiated coverage with an overweight rating and a December 2027 price target of 262 dollars, and placed the company on its “positive catalyst watch” list. Morgan Stanley maintained an equal-weight rating and a 205-dollar target, believing third-quarter revenue should beat expectations (Barron's). Two sharply different price targets for the same company frame Monday's after-hours test: the market wants to know not just whether growth is good, but whether it is worth the price.

IV. AI news: funding also begins to cool as OpenAI cuts its target by 10 billion dollars

• According to the Financial Times, OpenAI has cut its latest funding-round target from 30 billion dollars to 20 billion dollars, with its valuation remaining at 1.25 trillion dollars, below the initially proposed 1.4 trillion dollars. The report said the company had set last Friday as the deadline for investor commitments, some investors reduced their subscriptions, the first close was expected to be below 20 billion dollars, and a United Arab Emirates investor consortium including state-backed MGX was expected to be the largest participant (Financial Times, republished). The significance is not the 20 billion itself—it remains one of the largest private fundraisings in history—but the timing: it came after a 2.9% one-day fall in the Nasdaq, suggesting that even an unlisted AI leader is beginning to feel public-market pricing pressure over the AI bill.
• Another underlying theme is the method of financing: CoreWeave fell 9.7% to 54.87 dollars, less than 4 dollars from its low for the year, and credit derivatives on its data-center debt had already raised alarm. Views cited by The Wall Street Journal divided this week's debate into two camps: bears believe hyperscalers spend too much, earn too little and borrow to fill the gap, while bulls point to chipmakers' AI orders still growing exponentially, with visibility extending several years (The Wall Street Journal). The two camps are not actually at odds: the orders can be real and so can the bills. The market is debating whether orders can be monetized faster than bills come due.
• A Bloomberg market wrap noted that the S&P 500 briefly approached its 100-day moving average, a key technical level, on Friday, while the Nasdaq 100 had lost more than 1.2 trillion dollars in market value during October (Bloomberg, republished). Reuters earnings statistics offered another perspective: as of Friday, 299 S&P 500 companies had reported third-quarter results, 82% had beaten expectations, and analysts now expected overall third-quarter earnings to grow 31.6% year over year (Reuters). Earnings are not bad, yet shares are falling all the same. This is the most memorable lesson from October's close: the question behind this sell-off is not whether companies are making money, but whether they are making enough to pay the bills.

V. Forward calendar (Hong Kong time)

• 2 November (Monday), 23:00: US ISM manufacturing PMI for October; after the close (early 3 November Hong Kong time), Apple and Palantir report earnings. About 135 S&P 500 companies report next week (Barron's).
• 3 November (Tuesday): US midterm elections; AMD, Amgen and Pfizer report earnings after the close (Barron's).
• 4 November (Wednesday): US ISM services PMI for October; McDonald's and Qualcomm report earnings (Barron's).
• 5 November (Thursday): Airbnb reports earnings (Barron's).
• 6 November (Friday): US nonfarm payrolls report for October (Bureau of Labor Statistics), the week's key economic release; Moderna reports earnings (Barron's).
• 17 November and before Thanksgiving: Barron's lists Nvidia's 17 November earnings and Anthropic's expected IPO as potential catalysts. JPMorgan Private Bank calculates that over the past 29 years, the S&P 500 gained an average of 2.3% in November, its best-performing month of the year (Barron's).
• Note: The US has entered standard time. Next week, regular US stock trading hours correspond to 22:30 through 05:00 the following day in Hong Kong, with the open one hour later than during daylight saving time.