Catenaa, Saturday, November 07, 2026- Tech stocks in the S&P 500 traded at about 17 times expected earnings this week, below the broader index’s 18 times for the first time since 2017.
“At a 32.0x P/E last year, the market had baked in a lot of good news. Arguably, at almost half that level, the market is already pricing in a lot of bad news.” Truist Wealth Chief Investment Officer Keith Lerner wrote in a note Thursday, according to Yahoo Finance.
Technology shares experienced significant volatility during the week, but losses were less widespread across the broader US equity market. The equal-weighted S&P 500 reached a record high on Wednesday and finished the week approximately unchanged, according to Yahoo Finance.
Semiconductor companies were among the worst affected by the technology sell-off. Yahoo Finance calculations showed that the Philadelphia Semiconductor Index declined for five consecutive weeks, losing nearly 30% over the period. Micron and SanDisk each recorded weekly declines of more than 20%.
Moreover, Lerner told Yahoo Finance that chip stocks may see further selling pressure if AI infrastructure construction slows, while a slowdown in AI spending could ease the cash drain on the companies.
“If this forces a little bit of a slowdown and maybe a little bit of positive in cash flow, I think that could actually elongate the cycle,” he said.
According to Yahoo Finance, Truist advises staying overweight US large caps and adding small caps “as a partial hedge against periodic sharp rotations away from megacap tech.” The firm also notes that stocks have risen in the year after every midterm since 1946.
According to Yahoo Finance calculations, the stock market has recovered with a median gain of 6% in 80% of the cases in the following three months after the S&P 500 has had 33 streaks of four or more losing weeks since 1990. That’s better than the typical three-month return of about 3% after any week.
But there were exceptions during the dot-com bubble and the financial crisis in 2008, when the S&P 500 kept falling for another year.
TraderMindset.com founder Michael Martin told Yahoo Finance. “It’s a time to harvest cash right now.”
“I don’t think these are buying opportunities. Everything’s in a downtrend,” he told Yahoo Finance.
Martin also told Yahoo Finance that lower tech stock prices will not automatically attract valuations, and said he would consider limited exposure through call options only if the S&P 500 remained above its 200-day moving average, a widely followed technical indicator.
