Update, November 5, 2026
SPY fell another 3.9% on November 5, bringing the five-day loss to 4.2%, as a sharp pullback in chip stocks and post-midterm election jitters hit the broader market (PR Newswire). The S&P 500 dropped 3.5% to 7,419.07, with the VIX surging above 28 (CNBC).
The picture holds: the pullback inside the weekly uptrend has reached oversold (RSI 36.8), and price remains above the 40-week average. The key support at 730.32 (swing zone) is now just 0.9% below the current price of 736.85, while the 200-day SMA sits at 730.17. A daily close above 750.0 on above-average volume would signal an upside breakout, but the reward-to-risk to the first target (756.51) is only 0.3, and to the 50-day SMA (766.47) it is 0.7—far below the 3-to-1 threshold. What would change the picture: a weekly close below 719.59.
The SPDR S&P 500 ETF Trust (SPY) fell 1.7% to about $755.95 on October 30, 2026, after disappointing results from Amazon and Intel followed Alphabet's worst day in over 20 years. That leaves the fund 3% below its October 6 peak and oversold, inside a weekly uptrend that is still intact. The balance of evidence leans positive for the next 2 to 6 weeks, but conviction is low.
Why it matters
The week's damage came from the biggest technology names in the basket, not from the index as a whole. On October 29 the S&P 500 slipped 0.3% to 7,720.39 while the Nasdaq Composite lost 1.4%, because Alphabet's Class A shares fell 12.6% after earnings, according to Fortune. Microsoft's beat had lifted its shares about 3% after hours, so the hyperscaler results were mixed rather than uniformly poor, as CNBC reported. On Friday the pressure spread. Barron's had Amazon down 6.5% and Intel down 26% in premarket trading, the first on weak retail results that outweighed solid cloud figures, the second on soft sales and tepid guidance. Treasury yields fell and oil rose.
SPY dropped 1.74% in the session, which shows how little cushion the mega-cap names leave when several of them miss in the same week. The five-day move is only 0.53% lower, and the one-month move is 0.88% lower. Because SPY is the market benchmark, its 5-day change is the market's: there is no separate sector fund to compare against, and no gap between fund and market to explain. The split that matters is inside the basket. The New York Times described AI-linked tech stocks falling by double digits in October on worries about debt-funded AI spending and high valuations, while energy, utilities and consumer staples kept the index near a small monthly gain. The fund is up 10.9% for the year and 5.2% over six months, so this is a dent in a good run rather than a reversal.
The argument about SPY comes down to what the AI names are worth, and what stocks as a whole offer next to bonds. The cautious side has two voices. CNBC's Investing Club downgraded Alphabet and cut its price target to $350 from $400, though it kept the position because of momentum in cloud. Separately, Bank of America Securities called this one of the best entry points for bonds against stocks in over two decades, with Treasury yields at 19-year highs. The constructive side is the market's own behavior: the index is absorbing the tech sell-off because other sectors are carrying it, and dividend-focused funds have beaten the broad market in October, as Morningstar noted. An ETF has no analyst target or earnings of its own, so there is no valuation spread to weigh here. The valuation question belongs to the holdings, and the news speaks to it only through the AI names.
What the evidence says
The long-term thesis is intact. SPY trades above its 40-week average and well above its 200-day average of $728.86, and the 52-week range runs from $631.97 to $779.09, so the fund sits about 20% above its low and 3% under its high. The phase is a pullback inside an uptrend rather than a top. The fund has slipped below its 10-week average and its 50-day average of $767.50, which is what a pullback looks like, not a trend break.
For the next 2 to 6 weeks the balance of evidence leans positive, but conviction is low: one point out of four. The only supporting reason is that a pullback inside the weekly uptrend has reached oversold, with the 14-day RSI at 34. That is a condition that has tended to precede rebounds in uptrends, but it is one signal, and nothing else yet confirms buyers are returning.
The strongest case against it is that the damage is recent and still unfolding. The fund fell 1.7% in a day, sits below both its 10-week and 50-day averages, and the AI spending worries driving the tech sell-off have not been resolved by this week's earnings. Volume was also 31% below its 20-day average, so the decline has not attracted heavy selling but has not drawn buyers either. That thin participation cuts both ways, and with the fund still under its short-term averages it is a large part of why conviction stays at one point rather than more.
Levels that matter
The structure stays above $750, a round number sitting just under the current price. A break below it would be the first crack. Below that, the next support is $730.32, and the weekly trend would end below $719.59, a swing zone that also sits under the 200-day average. Above $719.59 the uptrend's sequence of higher lows is still in place.
The breakout level is a daily close above $756.51, a swing-zone resistance almost level with the current price, on volume above its 20-day average. From there the first target is the 50-day average at $767.50 and the second is $777.66, a swing zone just under the October peak. The math is set against a stop at $748.01, which is $750 minus a quarter of the 14-day ATR of $7.94. That gives 1.3 to 1 to the first target and 2.5 to 1 to the second. It does not reach the 3 to 1 that makes a breakout worth the risk. A target at the next marked level, $800, would clear it, but that is beyond the zone the first two targets cover.
What would change the picture
A weekly close below $719.59 would end the weekly uptrend and turn the evidence negative. The non-price fact most likely to produce that is proof that the AI-spending doubts have spread from a handful of mega-caps to the earnings and capital plans of the wider index, so that energy, utilities and staples can no longer offset the hit. Until then, this week's earnings misses read as damage to individual holdings.
What to watch
- November 4, 2026: U.S. midterm elections. CNBC reported that S&P 500 options price about 1.2 times a typical day's volatility, roughly 20% above normal, and a contested count would be the surprise.
- The close on $756.51: a daily close above it on above-average volume would be the first sign that buyers are back.
- $750: a close below it is the first crack in the structure.
- Mega-cap tech: whether Alphabet, Amazon and Intel stabilize or whether more AI-linked names follow them lower.
- Defensive sectors: whether energy, utilities and staples keep carrying the index.
- Flows and holdings changes: none are reported in this week's news.
- $719.59: a weekly close below it would change the picture.