No. 004Friday, October 30, 2026Fri, Oct 30, 2026Close edition
We give you the facts, the moves, and, of course, The facts, the moves, and what we make of it all.
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S&P 5007,580.07−1.82%
Nasdaq25,437.00−2.86%
Dow51,770.31−1.09%
Russell 20002,811.84−1.66%
VIX19.42+12.9%
10-yr4.93%−6.0 bp
WTI$104.12+2.1%
Dollar101.90−0.14%
Gold$3,898.90−3.3%
The Open
Today in one paragraph
Intel fell 28.6%, its worst day in at least ten years, after forecasting less revenue than Wall Street expected and saying the PC slowdown will last into next year. The rest of the chip business went with it: AMD and Qualcomm fell about 11% each, and the VanEck Semiconductor ETF 7.0%. Lumentum fell 8.6% as chip stocks sank and CNBC's David Faber said Marvell's proposed deal for it won't come at a big premium. Crypto stocks fell after Binance, the world's biggest crypto exchange, said about $6.3 billion was affected in a hack. Two Fed presidents said rates need to rise again. Gold fell 3.3%, and U.S. crude rose 2.1% to $104.12. The S&P 500 lost 1.8% and the Nasdaq 2.9%. For October, the S&P 500 fell 0.9% while its equal-weight version rose 4.9%. Our read: October was a good month for the average stock and a bad one for the biggest. The market isn't falling apart; it is falling out of love with AI.
The average stock rose in October; the biggest ones sank. Technology and communication services, home of the biggest companies, fell 8% to 10% and dragged the S&P 500 down 0.9% while nine of the eleven sectors rose. October returns, Sept. 30 to Oct. 30 closes, of the eleven Select Sector SPDR funds, the equal-weight S&P 500 fund (RSP) and the S&P 500 fund (SPY), from our price books.
What Happened Today?
The most important stories, through our eyes
No big premium for Lumentum, Faber says
CNBC's David Faber says Marvell's proposed deal for the laser maker won't come at a big premium, and Lumentum drops 8.6%.
Lumentum LITE $840.70 −8.6%Marvell MRVL $196.40 −10.0%
What the market heard
Lumentum, spun off from JDS Uniphase in 2015, makes the lasers that carry data as light between the servers in AI data centers, and lately optical switches. Its stock more than quadrupled in a year and peaked at $1,133.40 on Oct. 6. On Thursday, Bloomberg News reported that Marvell, the chip designer, was in talks to buy it, and Marvell's own stock fell 13.2% while Lumentum barely moved.
On Friday, CNBC's David Faber said the proposed deal won't come at a big premium, CNBC reported. Lumentum fell 8.6% to $840.70, 25.8% below its October high. Marvell fell another 10.0% to $196.40, on a day the chip stocks fell hard after Intel's forecast. In two days, Marvell has lost 22.0%, more than $50 billion of market value. Neither company has announced a deal. Lumentum reports its quarter after the close on Thursday, Nov. 5.
What it might mean
A target usually rises when a bid is reported. Lumentum has now fallen on both days, so the market is pricing a deal at roughly today's price, maybe with Marvell's stock as the currency, and Marvell's stock just got 22% cheaper. That fits our call on Thursday: if a deal is signed, the premium is under 20%. Our call now: Lumentum's own numbers on Nov. 5 matter more to its stock than the deal talk.
What would kill it
A signed deal at a premium of more than 30% to Lumentum's last price, or either company saying the talks have ended.
Lumentum, the past three months, with the deal news
The biggest crypto hack hits crypto stocks
Binance, the world's largest crypto exchange, says about $6.3 billion was affected in an attack, and the stocks tied to crypto fall.
Binance, founded in 2017, is the world's largest crypto exchange by daily trading volume. On Thursday it said roughly $6.3 billion was affected in an exploit, the biggest hack in crypto's history, and the security firm TRM Labs linked it to North Korea, CNBC reported. Tether, Circle and other crypto firms said they had frozen about $3 billion of the stolen funds, and Binance said it had started recovering assets and keeps a $1.2 billion fund to cover users' losses. The previous record, at Bybit, was about $1.5 billion.
Bitcoin held up better than after past hacks: it traded at $77,065 at 1:34 p.m. Eastern, down about 4% on the day, against an average first-day drop of 8.3% after past exchange hacks, according to Anchorage Digital data cited by CNBC. The stocks did worse. Coinbase, which reported its quarter on Thursday, fell 10.6%. Robinhood fell 7.2%, Strategy, the company that holds bitcoin as its main asset, 7.8%, and Galaxy Digital 11.7%.
What it might mean
The hack hit the exchanges' reputation more than bitcoin's. Bitcoin's own network wasn't breached, and buyers who hold it for years didn't flinch. The stocks are a different crowd: they trade with the Nasdaq, and on a day the Nasdaq lost 2.9% the hack gave sellers a reason. Our call: if Binance makes users whole, as it says it will, bitcoin is back above $80,000 before these stocks recover their Friday losses.
What would kill it
Binance halting withdrawals or saying users will bear losses, or a second big exchange reporting a breach.
What it is.Software that watches other companies' apps and cloud servers and raises the alarm when something breaks. Founded in New York in 2010.
What we know. It reports its quarter on Nov. 4. Other cloud software fell too, though less: Cloudflare 9.5%, MongoDB 8.3%, Snowflake 7.3%, Elastic 5.8%, Dynatrace 5.4%. Twilio, which also sells software to developers, fell 15.2% after its own forecast. Datadog is 20% below its high of the past year.
Today vs. other cloud software
Our guess: guilt by association. When the big AI spenders signal they will spend less, the companies that bill by how much computing their customers use get sold first, and Datadog, days before its own report, took the hardest hit.
What it is. The wireless carrier with the magenta logo, majority-owned by Germany's Deutsche Telekom.
What we know. No news on Friday; it reported its quarter on Wednesday. A Deutsche Telekom filing on Thursday shows its stake up to 55.9%, but only because T-Mobile bought back its own shares; it reported no purchases. The other phone and cable companies rose too: Comcast 4.3%, Verizon 2.5%, AT&T 2.3%, Charter 2.3%, on a day the S&P 500 fell 1.8%. T-Mobile is still 29% below its high of the past year.
Today vs. other phone and cable companies
Our guess: a hiding place. Phone bills get paid in any economy, and on a day money fled AI, the cheapest of the steady payers drew the most of it.
The Earnings Desk
Results, briefly
IntelINTC−28.6%, its worst day in at least ten years. The stock had more than tripled this year by the end of September; it has now lost 45% in October alone. Intel forecast fourth-quarter revenue of $15 billion to $16 billion, against the $17.1 billion analysts expected, and earnings of 25 cents a share against 43 cents. Its data center and AI revenue jumped 78% to $7.3 billion, but its PC chip revenue fell 5%, and finance chief David Zinsner said the PC slowdown will continue "at least through the first half of next year." A company that makes about half its money from PCs just said PCs are shrinking, and AI isn't growing fast enough to fill the hole yet.
The warning took the PC and chip makers down with it: Qualcomm 11.1%, AMD 10.9%, Dell 10.8% and HP 9.6%, while the VanEck Semiconductor ETF fell 7.0% and Nvidia 4.2%. AmazonAMZN−1.4% did better: it had fallen more than 7% after hours on Thursday on its earnings miss and negative free cash flow, and recovered most of that by the close.
"Last report" is the stock's move the session after its previous results.
Closing the Books
The month, audited.
October, Sept. 30 to Oct. 30 closes
Dow Jones industrials
+1.7%
S&P 500
−0.9%
Equal-weight S&P 500 (RSP fund)
+4.9%
Nasdaq
−5.3%
Small caps (Russell 2000 fund, IWM)
+0.5%
10-year Treasury yield
5.29% to 4.93% (−36 bp)
U.S. crude, spot
+13.9%($90.42 to $102.97)
Gold, spot
−6.7%($4,157.80 to $3,878.96)
Dollar index
+0.4%
Bitcoin
−8.1%
VIX
16.34 to 19.42
October: the Dow, the S&P 500 and the Nasdaq, Sept. 30 = 100
October was the month the market stopped paying for promises.
Look at the scoreboard. The average stock had a fine month: the equal-weight S&P 500, in which every company counts the same, rose 4.9%, and nine of the eleven sectors gained, energy most of all. The S&P 500 itself fell 0.9% and the Nasdaq 5.3%, because the handful of giants that dominate both had a terrible one. That six-point gap is the month in one number.
The giants spent October reporting what their AI build-out costs. Meta and Alphabet showed negative free cash flow, and Alphabet had its worst day since it went public. Amazon's free cash flow over the past year came to negative $42.4 billion. Microsoft trimmed its spending plan and kept its free cash flow positive. Then Intel said PCs are shrinking and lost more than a quarter of its value in a day. None of these companies is in trouble. But for two years investors paid in advance for profits from AI, and this month they asked to see the receipts.
Meanwhile the war set the price of everything else. More commercial ships were attacked in the Strait of Hormuz in October than at any other point in the war, at least 30 vessels by Oct. 27 against 15 confirmed incidents in September, according to the International Maritime Organization data cited by CNBC, and U.S. crude rose 13.9%. The economy grew at a 3.4% rate in the third quarter, inflation by the Fed's favorite gauge reached 3.6%, and the Fed held, with two officials voting to hike. On Friday, St. Louis Fed president Alberto Musalem said more tightening is needed "soon," and the Dallas Fed's Lorie Logan said at least two more quarter-point hikes, CNBC reported. The strange part: the 10-year yield fell 36 basis points anyway, and gold fell 6.7%. Bonds and gold both seem to be betting that a Fed this determined wins, and that the war ends before the inflation it feeds becomes permanent. That is a lot of faith to place in one November.
The Call
Our paper portfolio, rebalanced once a month
Rules-based sector rotation
No. 1
For November 2026
Sealed at the closeOct 302026
Today our paper portfolio opens. At the close it buys six equal-weight sector funds, chosen by our rules-based sector rotation, and holds them until the last close of November.
At the close, the paper portfolio buysWeight
MaterialsRSPMNewChemicals, metals, mines and packaging
44.1%
FinancialsRSPFNewBanks, insurers, exchanges and asset managers
19.0%
TechnologyRSPTNewChips, software and the hardware that runs them
17.9%
IndustrialsRSPNNewPlanes, rails, machines and the firms that service them
13.5%
UtilitiesRSPUNewPower and water
5.4%
Consumer discretionaryRSPDNewCars, stores, restaurants and travel
0.1%
How we keep score. Each Call is scored at the next month-end close against the equal-weight S&P 500 (RSP). That is the fair yardstick: our portfolio holds equal-weight sector funds, in which every company counts the same, so it is measured against the index built the same way. The ordinary S&P 500 (SPY) is shown alongside. The first score comes with the November month-end issue.
Opinion, not investment advice. A paper portfolio: no real money and no trading costs, and past results don't predict future ones. The author does not hold or trade these funds. Full disclaimer
Connecting the Dots
Where we are, and where the puck goes next
November will be decided by three dates, not by AI.
The midterms on Tuesday, the jobs report on Friday, and the Fed on Dec. 9. Everything else is noise until those three are known.
On Thursday we put 25% on "everything gets marked down." Friday moved us: the selling reached well past AI, with the Russell 2000 down 1.7%, and two Fed presidents asked for more hikes. We now put that scenario at 35%, and the rotation, still the most likely, at 40%.
Where the puck goes next: our odds through November
The rotation keeps going40%
Money keeps leaving the AI giants for the rest of the market. The equal-weight S&P 500 beats the ordinary one again. Winners: energy, staples, utilities, phone companies. Losers: chips and the cash-burning AI giants.
You'll know it's this one if the equal-weight S&P 500 (RSP) beats the S&P 500 (SPY) over November.
Everything gets marked down35%
A strong jobs report locks in a December hike, strikes on Iran after the midterms push oil higher, and nothing looks cheap at those rates. Winners: oil, the dollar, short-term Treasuries. Losers: small caps first, then everything priced on distant profits.
The tell: the Russell 2000 closing more than 5% below Thursday's 2,859.22, that is, under 2,716.
AI wins back the crowd25%
Nvidia's report on Nov. 17 shows demand still outrunning supply, and the giants bounce. Winners: chips, the hyperscalers. Losers: the defensive names that led October.
The tell: Alphabet closing back above $324.89, its price before Thursday's drop, by Nov. 30.
What would make us tear this up: a weak jobs report on Friday that takes the December hike off the table while oil keeps rising. That mix, a slowing economy with higher energy costs, fits none of our three. We'll keep score at the end of November.
Monday ISM's read on October's factories at 10 a.m. Eastern, then Apple and Palantir after the bell. Tuesday is Election Day.
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