The AI Bill Came Due. Almost Everything Else Got Bought.

The AI Bill Came Due. Almost Everything Else Got Bought.

The Treasurer's Market Read · Week of November 2, 2026

Last week looked worse on the scoreboard than it was underneath. The S&P 500 fell 0.6% for the week and 1.8% on Friday alone, closing at 7,580, its lowest close since mid-September, per RIA Advisors. Intel lost roughly 29% in a single session after a weak outlook, and Alphabet dropped 12.6% the day before.

But look past the headline index and a different picture shows up.

The selloff was narrow

Nine of the 11 S&P 500 sectors rose last week. The equal-weight version of the index, where every company counts the same, gained 0.8%, per RIA Advisors. Nearly all the damage came from two sectors: technology and communication services. Those two carry the most weight in the index, and they carry the AI spending story.

That story changed tone. Investors aren't doubting that artificial intelligence works. They're asking who pays for it. Alphabet's cloud business grew fast, yet heavy spending on data centers left investors asking when it pays back. The market isn't rejecting AI. It's rejecting AI spending that doesn't pay for itself yet.

A great technology doesn't make every company built on it a great investment, and it doesn't justify any price.

The "safe" trade is getting crowded

Money that left tech didn't leave the market. It ran to energy, health care and consumer staples. Now those are the stretched ones.

Energy sits 9.5% above its 50-day average relative to the S&P 500, and health care 9.0%, per RIA Advisors. Energy hit a record high on Friday. Meanwhile communications sits 8.4% below and technology 3.9% below.

Stretches like that tend to snap back toward the average, in both directions. When everyone hides in the same place, the hiding place becomes the risk. RIA's growth-versus-value ratio is now near its March low with a washed-out momentum reading. RIA calls it a setup to prepare for, not a signal to chase: the turn isn't confirmed until the ratio climbs back above its 50-day average.

The levels that matter this week

Friday's close broke the 100-day moving average for the first time since early April. The longer-term trend is still intact: the index sits 3.7% above a rising 200-day average.

Two lines to watch, per RIA Advisors:

• 7,615 (the 100-day). A close back above it would make Friday look like a one-day shakeout.
• 7,490 (the July 31 close). A close below it opens the door to the 200-day near 7,310.

One caution from history: closes below the lower trading band marked short-term lows in July and September, but in March the index closed below it six times over three and a half weeks before it bottomed. Oversold isn't a floor.

Where the year stands

Step back from the week and the picture is steadier than Friday's headline. Even after the drop, the S&P 500 is up 10.7% for the year, measured from the last close of 2025, per Federal Reserve Bank of St. Louis data. It sits 3.1% below its record close of 7,819 on October 6, and 1.5% below its 50-day average of 7,697. For October as a whole the index slipped 0.9%. That is a pullback from a high, not a collapse. The nearest floor below Friday's close is the September 16 low of 7,552, and the long-term 200-day average, 3.7% under Friday's close, sits further down. Every one of those readings comes from public price data, not from a forecast, so you can check each line yourself.

The bond market is the other half of the story. The 10-year Treasury yield was 4.98% on October 29, nearly a full point above the top of the Fed's range. When safe bonds pay close to 5%, stocks have to offer a clearer reason to own them, and that is part of why investors are asking harder questions about what AI spending will earn.

The week ahead

Tuesday: the midterms. Every House seat and 35 Senate seats are on the ballot. Prediction markets have largely priced an outcome, per RIA Advisors, so the bigger risk is a surprise in a close Senate race or a count that drags on for days. Even once control of Congress is known, which policies actually become law can take months. Watch how the market responds, not just who wins.

All week: AI earnings, round two. Apple and Palantir report Monday after the close, AMD on Tuesday, then Qualcomm and Arm on Wednesday. After several weeks of tech beats that sold off anyway, beating estimates may not be enough. The question is what companies say about spending, margins and the next quarter. If AMD or Palantir shows AI demand turning into cash, the beaten-down chip and software names could bounce hard.

Friday: the jobs report, and the Fed's dilemma. The Fed held rates at 3.75% to 4.00% last week, but two officials dissented in favor of a hike. Inflation is still well above target: the PCE price index rose 3.6% over the past year, and 3.1% excluding food and energy. At the same time, hiring has stalled. September added just 29,000 jobs, per Labor Department data, far fewer than economists had expected.

That's the bind. Hike into a weak job market and you risk making it worse. Hold with inflation this high and prices keep climbing. A soft jobs number would push December's hike in real doubt. The mix to fear is a weak headline number with hot wage growth.

What I'm watching

• Does the S&P reclaim 7,615, or lose 7,490?
• Does the equal-weight index keep rising through Apple's results and the jobs report? If it does, last week was a rotation. If not, it may be the start of something bigger.
• Do oil and the 10-year yield stop climbing? Growth stocks don't need them to fall, only to stop.

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We may receive a payment if you sign up through this link. The call is free; the program it introduces is paid. This column is education, not financial advice. Options and stocks involve risk of loss. Figures credited to RIA Advisors where noted.

First published on Think and Act Locally: https://thinkandactlocally.com/treasurer/2026-11-02-the-ai-bill-came-due