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Wall Street Rotates Out of Tech

Tech stocks drag major indexes lower despite a sharp decline in oil prices.

Author

Elie Zakhour
November 03, 2026

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Big Tech Passes the Hat

If you bought the Nasdaq at the open Monday, we’re sorry. Stocks spent the morning bouncing back from Friday’s beating, with the S&P 500 up as much as 1.1%, and then it all fell apart after lunch. The S&P and Nasdaq closed Monday down 0.51% and 1.07%, respectively, while the Dow somehow finished green, up 213.67 points. Everyone's favorite small cap index, the Russell 2000, also finished about 0.2% lower.

The weird part about all of it was that most stocks actually went up. Nearly 7 in 10 S&P 500 names closed higher, and the damage was mostly in tech where the big question right now is who’s going to pay for all these data centers. Oracle answered by filing to sell $10 billion of new stock plus $10 billion in bonds, which is a big ask for a stock that was already struggling. It fell about 8.76%. 

Chip stocks got hit again. The Philadelphia Semiconductor Index fell 3.37%, and Nvidia went from up about 2.6% in the morning to down 1.3% at the close. Marvell also announced a $115 billion all-stock deal for Lumentum, and both stocks went straight into the compost bin. More on that mess in What's Rotten.

Oil was the other big story. Brent fell 7.6% to $104.77 a barrel and WTI dropped more than 7% to around $96 on hopes that the U.S. and Iran might get back to the table. Airlines and cruise lines ate it up, with United rising 4.8% and Carnival gaining 4.2%, while Exxon fell 4% and Occidental lost 5%. Over in the Dow, Sherwin-Williams, of all things, jumped almost 6% and Home Depot added 3.6%, and those two did a lot of the heavy lifting.

The economic data was fine. Better than fine really. ISM manufacturing came in at 55.5 for October, ahead of forecasts, and the prices-paid number cooled off to 75.2 from 77.9. The 10-year yield fell to 4.89% and gold rose about 1.5%. Bitcoin fell back under $77,000, in case you were wondering how digital gold did on a good day for the real thing. None of it really moved the Fed needle much, with futures still pricing roughly a three-in-four chance of a December rate hike. 

Today brings the midterms, AMD reports tonight, and the October jobs report is out Friday. Busy week.

Peel Take: Oracle is now selling stock at about a third of its September 2025 peak, and Marvell is paying for Lumentum with shares that have dropped 32% since the talks leaked. If a company wants to fund its growth by handing out more of itself, shareholders get to ask for a discount, and on Monday they did. Still, we wouldn't call any of this a crash. Most stocks went up, and cheaper oil is good news for almost everybody who isn't an oil company. It looked to us like people were moving money out of tech and into other parts of the market. If you own AI stocks, the thing to watch now is which companies can pay for their own growth and which ones keep coming back for more.

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What's Ripe

IDEXX Laboratories (IDXX) 21.85% 

  • IDEXX ripped 21.85% to $671.64 after a third quarter that came in ahead of Wall Street's numbers. Revenue grew 10% to $1.21 billion, and operating margin widened a full point to 33.1%.

  • It also raised its 2026 outlook to between $4.741 billion and $4.767 billion in revenue and $14.96 to $15.16 a share in earnings. A lot of that comes from vets running more tests on every animal that comes through the door, plus more than 1,900 new inVue Dx analyzers placed during the quarter.

  • Peel Take: Vet visits in the U.S. have been slowing, and IDEXX put up this quarter anyway. The pets that do come in are getting the full workup. IDEXX sells the machines and the tests that run on them, so each new analyzer expands its base for recurring diagnostic revenue. On a day the market was punishing expensive AI expansion plans, a company growing on more bloodwork per golden retriever was an easy buy.

Tempus AI (TEM) 8.67% 

  • Tempus AI rose 8.67% after third-quarter revenue grew 23% to $411.5 million. Oncology testing volume was up 32%, and the Data & Applications business grew 33% to $108.1 million.

  • Adjusted EBITDA came in at $25.6 million, up from $1.5 million a year ago. Tempus also bumped the low end of its 2026 revenue forecast up to $1.60 billion (the top end stays at $1.605 billion) and kept its adjusted EBITDA target at around $65 million.

  • Peel Take: A bit of a funny day for AI. The market dumped AI names facing questions about how they'll fund their growth, then bid up one making money selling data and diagnostics. Makes sense to us. The data business is the part we care about. It carries gross margins above 71% and it's growing faster than the rest of the company. We'd like to see a real profit before we get loud about it.

What's Rotten

Lumentum (LITE) 18.59%

  • Lumentum fell 18.59% to $684.40 after agreeing to be bought by Marvell. Lumentum holders will get 4.5 Marvell shares for each share they own, in a deal valued at $115 billion including debt, or about $1,132 a share based on Marvell's unaffected stock price.

  • That $1,132 was based on where Marvell traded before the talks leaked, which was $251.65. With Marvell closing at $171.41 on Monday, the offer is worth about $771 a share now, and Lumentum is trading around 11% below even that, partly because the deal isn't expected to close until the first half of 2028.

  • Peel Take: Lumentum shareholders just sold their house for concert tickets, and the tickets lost almost a third of their value before anyone even moved out. And the concert isn't until 2028. What makes it sting is that Lumentum also reported earnings Monday morning and beat, with $4.57 in adjusted EPS against the $4.22 analysts expected. Nobody cared. Its lasers are reportedly sold out into 2029, and the stock now trades on whatever Marvell does.

Marvell Technology (MRVL) 12.72%

  • Marvell dropped 12.72% to $171.41 once the deal was official. It's down about 32% since Bloomberg reported the talks on Oct. 28.

  • Marvell's pitch is a $550 billion market opportunity and more than $1 billion a year in cost savings, and it says the deal will add to adjusted earnings in the first year after closing. Investors mostly saw dilution. Lumentum shareholders will own 33% of the combined company.

  • Peel Take: We actually like the idea here. AI data centers are moving from copper wiring to optical connections, and owning the lasers would give Marvell a real edge there. We just don’t love what it costs. Marvell has lost around $70 billion in market value since the talks leaked, almost as much as Lumentum was worth before the announcement. The twist? As Marvell's shares fall, so does the value of the stock it's offering Lumentum shareholders. Using your stock as money gets a lot harder when investors keep marking down the currency.

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Banana Brain Teaser

Previous

A stock trades at $100, while a European call and put with the same $100 strike and expiration trade at $12 and $10, respectively. The present value of the strike price is $95, and the stock pays no dividends. Is there an arbitrage opportunity? If so, what trades would lock in a risk-free profit, and how much would that profit be per share?

Answer: Yes, $3 per share. Buy the call and a bond paying $100 at expiration; short the put and stock.

Today

The market is equally likely to be in a bull or bear regime. In a bull regime, each stock has an 80% probability of rising; in a bear regime, that probability falls to 30%. Two stocks rise, with their movements independent conditional on the market regime. What is the probability that the market is actually in a bull regime?

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