Morning update 3 November 2026 (EN): Chip deal blows up, disappointment pushes tech indices into correction territory

What occupies me most this morning is how Monday unfolded as a session with 2 faces. We started sharply higher on a technical rebound after Friday's steep decline, but the turn lower was just as violent, if not more so, with the Nasdaq 100 even diving deep below break even again. The results from Apple and Palantir after the close could do little about that, because both stocks gave up further ground even after the results. Today the US midterm elections come on top of that, which makes the market volatile for now and actually still too dangerous to do anything active with. Without clear momentum it is much wiser for me at this moment to stay on the sidelines and calmly wait for more clarity. I also noticed the persistent split between technology and the more traditional names, with the Dow Jones winning while tech stocks sink further. The oil sector also had to give ground on Monday.

Marvell announced on Monday that it is taking over Lumentum in an all stock transaction that US media value at roughly $115 billion, with the Lumentum share valued at $1,132. Shareholders of both companies reacted negatively right away. Lumentum fell 18.59% to $684.40 (almost half of the value at which the company is being valued) and Marvell lost almost 13% to $171.41, which immediately made them 2 of the biggest decliners on Wall Street on Monday.

Analysts point to risks such as possible shareholder opposition and the need for Chinese approval of the deal. The timing also coincides with a broader pullback in the chip sector, where Intel also fell further, down 8.8%, still feeling the effects of last Friday's sharp price drop.

The sharp reaction to the deal between Marvell and Lumentum fits a market that currently has little patience with uncertainty, certainly in the chip sector. An acquisition that would normally be seen as strategically sensible is now judged mainly on risk and timing, a sign of how nervous investors are at the moment about AI related names. It is also the reason why I do not want to burn my fingers on this market right now.

Past results offer no guarantee for the future.

The Dow Jones closed 0.41% higher on Monday at 51,984 points. The S&P 500 lost 0.51% to 7,541.4 points, the Nasdaq Composite fell 1.07% to 25,164 points and the Nasdaq 100 gave up 1.39% to 27,990 points. The chip index SOX took the hardest hit with a loss of 3.37% to 10,328 points.

Intel kept feeling the pressure and lost 8.80% to $59.97, in line with the broad chip selloff. Oracle dropped 8.76% to $119.22 after an analyst reaction to the announced $20 billion AI investment plan that not everyone agrees with. Amazon on the other hand gained 2.20% to $245.63, supported by a positive note about its cloud arm AWS. Alphabet was almost flat with a loss of 0.30% to $278.99, a week after the sharp decline that followed its own results.

After the close Apple and Palantir came with results. Apple booked a revenue record in the iPhone quarter with total revenue of $114.5 billion, but the stock still fell some 3% after the close, on worries about the growth of services and about the expected pressure on the gross margin from higher memory costs and AI spending for Siri. Palantir reported quarterly revenue of more than $2 billion for the first time, almost double that of a year earlier, but that stock also lost some 5% after the close, because investors could not stomach a slightly slower growth of US commercial revenue.

The US 10 year yield stands at 4.91% at the time of writing. The 30 year yield is at 5.29%. Gold stands at $3,925, silver at $49.15 and bitcoin at $76,535, with declines of 1.1%, 3.4% and 2.15% respectively. The volatility index VIX rose 9% to 21.15 points. Brent oil stands at $105.8 per barrel this morning, 1% higher, after the sharp decline of recent sessions from well above $110.

That the Dow Jones won while the Nasdaq 100 and the SOX lost heavily once again confirms the sharp split between technology and the more traditional names. The reactions to Apple and Palantir show that after strong results investors still look critically at details such as margin pressure and the growth rate of specific segments. The higher VIX and the heavy decline at Oracle, Lumentum and Marvell indicate that the doubt about the profitability of AI spending is anything but gone.

The AEX closed 0.17% lower on Monday at 1,132.5 points. The DAX on the other hand gained 0.63% to 25,981 points.

On the AEX, Akzo Nobel jumped 4.45% higher to €61.94 and ArcelorMittal gained 3.54% to €55.50. Shell had to give up 3.26% to €47.10, its 3rd session in a row under pressure because of the ongoing negotiations about oil and gas supply around Iran and Qatar.

On the DAX, Rheinmetall gave up 3.62% to exactly €1,000, while MTU Aero gained 5% to €345.80 and Heidelberg Materials rose 4.05% to €156.55.

The AEX and the DAX are clearly moving differently today than the US technology indices, with the DAX even winning thanks to the strong day of MTU Aero and Heidelberg Materials. The persistent weakness at Shell shows that the uncertainty about oil supply via Iran and Qatar still weighs on the energy sector.

US futures point somewhat lower on Tuesday morning. In Europe the DAX future is quite a bit lower and the AEX future is lower as well, just after 08:00.

This afternoon at 4:00 PM Dutch time the Bureau of Labor Statistics publishes the number of job openings (JOLTS) for September. And today quarterly results come from among others AMD and Amgen.

Today the US midterm elections take place, for the House of Representatives and part of the Senate. That can certainly cause a lot of volatility towards the end of the session as results trickle in.

Monday was a session with 2 faces for me. The start was sharply higher thanks to a technical rebound after Friday's steep decline, but the turn lower was just as violent. First all the gains were given back and second the Nasdaq 100 dropped just as far below break even. A move of almost 800 points from top to bottom and once again violent, certainly because Friday's session already had an extremely volatile course.

The results from Apple and Palantir after the close could not really save the day, because these 2 stocks had also lost ground during the regular session and gave up some extra ground after the results.

Today the midterm elections take place in the United States, where according to the polls the Democrats may take over. These are all items that make the markets volatile and that still make it actually dangerous to do anything. The momentum is not there, and without momentum it is much wiser to stay on the sidelines and wait for more clarity. We only have to look at how the market moved last Friday and especially yesterday, Monday 2 November. The chance of taking a big loss was larger than the chance of making a nice profit at such a moment.

That is why I say it once more. There are 3 positions you can always take. That is long, betting on a rise, that is short, betting on a decline, and that is doing nothing, in other words staying out of the market at moments when it is completely unnecessary to take risks. And we are in such a phase now.

The divergence between technology and the more traditional names was again striking. Technology lost, while the Dow Jones actually won. What also stood out was the steep decline of the oil price. We see some recovery again today, but the oil price fell from well above $110 to around $105.

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One day before the result of the US midterm elections is known, a chip deal that immediately meets resistance from its own shareholders, and a chip index that is once again falling heavily, that is a perfect breeding ground for fear. Fear is the feeling that makes investors press the sell button fastest, often even before they have properly thought about what has really changed in the underlying numbers.

From my role as a coach at Guy Systeem Trading, where I have also learned a lot about market psychology, I see fear appear most often just before clarity arrives, not after. Anyone who acts fully out of fear now runs the risk of getting in or out at the wrong moment. As long as the momentum is missing, waiting remains the wisest attitude, even if fear whispers something else.

“Fear screams the loudest at the moment when there is the least reason for it.”

The Dow Jones closed on Monday at 51,984 points, within the broad trading range in which the index has been moving since August. Above the price, 52,750 waits as the 1st resistance, with 53,250 as the next hurdle. Below the price, 51,500 offers support, with 50,300 as the next safety net. The price is just below the EMA-20 at 52,102 and the SMA-50 at 52,186, with the SMA-200 at 50,617 still well below, so the SMA-50 remains well above the SMA-200.

In short.

• The price is just below the EMA-20 and the SMA-50, a slight short term weakness within the broader range.
• The SMA-50 remains well above the SMA-200.
• The Bollinger Bands are relatively close together, a sign of a calm phase.
• The MACD is almost level with the signal line, with a slightly negative histogram.

The RSI at 48.4 is in neutral territory, without a clear direction. The MACD is almost level with the signal line, with a slightly negative histogram, and the momentum is also almost flat. The Bollinger Bands are relatively close together, which points to a calmer phase, in sharp contrast with the unrest in the technology indices.

A clear pattern is missing, the Dow Jones has been moving more sideways for several weeks within the longer rising trend. The support at 51,500 holds for now. A new test of the resistance at 52,750 is likely as long as that remains so, although the price is not getting above it for the time being. A close below 50,300 would weaken the picture.

The Nasdaq 100 closed on Monday at 27,990 points, just above the SMA-200 at 27,940, but well below the EMA-20 at 29,484 and the SMA-50 at 29,770. Just above the price lies 28,200 as resistance, with 28,900 as the next hurdle. Below the price, 27,000 and 26,180 offer the next notable support, somewhat further below the price than usual. The SMA-50 remains above the SMA-200 for now, but the gap is getting smaller.

In short.

• The price fell well below the EMA-20 and the SMA-50, a clear short term warning.
• The price is even below the lower Bollinger Band, a sign of an exaggerated move.
• The MACD and the momentum are both firmly negative.
• The SMA-50 remains above the SMA-200 for now.

On the indicator side, the RSI at 32.0 is heading towards oversold territory, without being there yet. The MACD is clearly below the signal line with a firmly negative histogram, and the momentum is also strongly negative. The Bollinger Bands are far apart and the price is even below the lower band, which points to an exaggerated move to the downside.

In recent sessions the Nasdaq 100 broke down out of the rising price channel of recent months. The price is sinking again after a test of the resistance at 28,900, and is not getting above it for the time being. If the support around 27,000 holds, a rebound is conceivable, a close below it would weaken the picture further.

The SOX, the US chip index, closed on Monday at 10,328 points, far below the SMA-200 at 10,794, the EMA-20 at 11,456 and the SMA-50 at 11,839. Just above the price lies 10,500 now as resistance, a level that until recently still served as support, with 11,000 as the next hurdle. A first clear support we now see around 10,000. In recent days the index broke down out of the broad triangle that had been forming since the summer. The SMA-50 remains above the SMA-200 for now, but the gap is getting smaller.

In short.

• The price fell far below all 3 averages, a firm technical weakening.
• The MACD and the momentum are both strongly negative, with a wide histogram.
• The Bollinger Bands are strikingly far apart, a sign of extreme volatility.
• The SMA-50 remains above the SMA-200 for now, but they are now quickly approaching each other.

In terms of indicators, the RSI at 33 is heading towards oversold territory. The MACD is firmly below the signal line with a wide negative histogram, and the momentum also remains strongly negative. The Bollinger Bands are strikingly far apart, a direct result of the violent price movement of recent sessions.

In recent days the SOX confirmed a break down out of the broad triangle that had been forming since the summer, with the peak around 14,000 and the trough around the spring bottom. A technical price target based on the height of that pattern points in the direction of the support level around 8,400, should the pressure continue. The price is for now not even getting back above the resistance at 10,500, a rebound above that level and towards 11,000 is only the 1st signal of a clear recovery.