According to BiyaPay market analysis, the three major U.S. stock indexes closed lower last week, while small-cap stocks rose against the trend. Hong Kong’s Hang Seng Index rebounded, but the Hang Seng Tech Index continued to decline. The differences between the indexes reflect investors’ renewed comparisons of corporate earnings, funding costs, and valuations.
For those holding tech stocks, the key question now is whether this correction has changed the companies’ growth outlook. Those preparing to adjust their portfolios need to assess whether gains in other sectors can continue, and whether the rebound has sufficient support from business performance and funding.
As we enter November, the market needs to keep testing two things: whether AI investment can generate sustainable cash returns, and whether corporate earnings can withstand current funding costs. Earnings reports this week from companies including Apple, Palantir, and AMD, along with the U.S. nonfarm payrolls report, will provide new grounds for assessment.
I. Last week in review: Tech stocks came under pressure, but markets have not shifted fully into risk-off mode
At the close on October 30, the S&P 500 stood at 7,580.07, down 0.57% for the week; the Nasdaq Composite stood at 25,437.00, down 2.00%; and the Dow Jones Industrial Average stood at 51,770.31, down 0.85%. The Russell 2000 rose about 1.3% over the same period, while large-cap value stocks outperformed large-cap growth stocks for a fourth consecutive week.
ETFs linked to healthcare, utilities, and consumer staples rose 3.12%, 2.04%, and 1.31%, respectively, for the week. These are ETF price performances and do not directly represent changes in the operations of all their constituent companies. However, they show that as tech-heavy portfolios were adjusted, the market continued to seek other sources of earnings support.
Among them, Eli Lilly rose 11.31% for the week, reported third-quarter revenue growth of 39%, and raised its full-year revenue guidance. Its relative strength was backed by results, and serves as a reminder that the market is not trading solely on the labels of “tech” and “defensive.”
Volatility also needs to be viewed over time. The VIX closed at 19.42 on Friday, broadly unchanged from the previous Friday, but rose 12.91% on Friday alone. The modest change in the weekly closing level masked the renewed buildup of risk in the latter half of the week.
Fund flow data also do not point uniformly to a flight to safety. In the week through October 28, U.S. equity funds saw net outflows of $6.65 billion, while technology sector funds still attracted net inflows of $4.54 billion. These figures do not cover the tech stock selloff on Thursday and Friday, so they cannot explain all trading activity for the week.
For now, it is more appropriate to view the market as undergoing a selective correction. Whether money continues to leave tech and other sectors can take the lead still needs to be confirmed by future data.
II. Tech earnings: Beyond growth, compare how well companies convert it into cash
Microsoft and Alphabet are both expanding their AI businesses, but their cash flow performance differs
Alphabet’s third-quarter revenue grew 25% year over year, and Google Cloud revenue rose 103%, but free cash flow for the quarter was negative $9.065 billion. Microsoft Azure revenue grew 48%, and quarterly operating cash flow was $58 billion. After subtracting cash purchases of property and equipment, free cash flow on this basis was about $18.633 billion.
This shows that cloud revenue growth alone cannot answer whether investment is worthwhile. Cash flow, capital expenditure, and future investment commitments also need to be examined.
Amazon AWS revenue grew 39.3%, but free cash flow for the 12 months through the end of September was negative $42.4 billion. The metrics must be distinguished: the figures above for Microsoft and Alphabet are quarterly, while Amazon’s is a trailing 12-month figure. They cannot be used directly to rank operating performance.
For investors, the key questions are when new facilities will come online, whether customer purchases can continue, and how much of the revenue growth will ultimately translate into cash. If investment continues to outpace returns, companies may become more reliant on cash reserves and financing conditions. If revenue, profits, and cash conversion gradually catch up, the market will have a stronger basis for recognizing the value of capital expenditure.
Chips and optical communications: Weekly moves may mask portfolio volatility
Intel fell 24.38% for the week, including a 28.58% drop on Friday alone. The company reported third-quarter revenue of about $16.5 billion, but guided for fourth-quarter revenue of $15 billion to $16 billion, while management also flagged pressure in the PC market.
This shift raises the trading risk for semiconductors, but is not enough to prove that orders across the entire AI server supply chain are deteriorating in tandem. PCs, data centers, memory, and optical communications still need to be analyzed separately.
AMD fell 2.32% for the week, but dropped 10.88% on Friday; Lumentum rose 11.18% for the week, but fell 8.57% on Friday. Looking only at weekly performance can easily understate the risks posed by reversals during the week.
For investors holding these stocks, orders, deliveries, margins, and customer budgets are more closely tied to business fundamentals than price movements. After a rebound, subsequent positioning and fund flow data are also needed to judge whether buying can extend beyond short covering to new long positions. Price gains alone are not enough to identify the nature of the buying.
III. Hong Kong market: Banks and oil support the Hang Seng Index, while tech buying has yet to recover
Last week, the Hang Seng Index rose 0.87% to close at 23,294.42; the Hang Seng China Enterprises Index rose 1.37% to 7,862.22; and the Hang Seng TECH Index fell 3.02% to 3,754.90.
Bank, insurance, and oil heavyweights supported the broader market. ICBC rose 9.12% for the week, China Construction Bank rose 5.02%, AIA rose 6.12%, and CNOOC rose 6.83%. Tech hardware came under pressure, with SMIC and Lenovo Group falling 8.67% and 9.45%, respectively.
Therefore, a rise in the Hang Seng Index does not yet mean that growth stocks have broadly stabilized. For financial companies, watch net interest margins, credit costs, and dividend capacity; upstream oil companies are affected by oil prices, production, and costs; and tech hardware depends more on customer purchases and product deliveries. The reasons behind gains in different companies need to be validated separately.
As for fund flows, the sum of daily trading data shows that Southbound funds recorded net sales of about HK$11.036 billion for the week, with net selling on all five trading days. On Friday, the Hang Seng Index rose 1.46%, while Southbound funds still recorded net sales of about HK$3.560 billion.
This shows that the index recovery has yet to be confirmed by Southbound buying. However, Southbound flows represent only trading through Stock Connect; they are not equivalent to market-wide fund flows and cannot be used to infer the direction of foreign capital.
This week, watch whether Southbound net selling narrows, whether tech stocks find sustained support after their pullback, and whether market gains broaden beyond financials and resources. The sharp drop in U.S. chip stocks on Friday came after the Hong Kong market closed, so its additional impact will need to be assessed in this week’s trading.
Cross-market perspective: Capital allocation and trading tools both matter
Pressure on U.S. tech stocks and the relative strength of Hong Kong financial and resource stocks are prompting investors to compare opportunities across markets anew. But holding assets across different markets does not mean risk has been diversified. U.S. stocks, Hong Kong stocks, and digital assets may all be affected by dollar liquidity, interest-rate expectations, and expectations for tech growth.
For cross-market investors, it is not enough to assess the assets themselves; they also need to consider how to exchange funds, access the markets, and use the funds afterward. Multiple accounts, currencies, and trading platforms can all make fund management more complicated.
As a global, one-stop asset allocation platform, BiyaPay uses USDT as its core funding gateway and connects U.S. and Hong Kong stocks, cryptocurrencies, commodity futures, cross-border remittances, and other services through a single account system. It supports exchanges between more than 30 fiat currencies and over 200 digital currencies, and offers commission-free trading in actual U.S. and Hong Kong stocks. A centralized gateway can help reduce the need to switch between different tools, making currency exchange, trading, and subsequent fund arrangements more seamless. Specific services and fees are subject to the platform’s actual rules.
Even when fund transfers become more convenient, investment decisions still need to be based on the assets themselves. Markets differ in their sources of earnings, valuations, and risk profiles, so each should be assessed in light of the investment horizon and risk tolerance. This helps avoid portfolios that appear diversified but are in fact concentrated in the same type of risk.
IV. Macro outlook: Falling yields may not be enough to support tech stocks
On October 28, the Federal Reserve held the federal funds target range at 3.75%–4.00%, while two officials argued for a 25-basis-point rate hike. The statement continued to describe economic expansion as solid and inflation as elevated, indicating that policy had not yet shifted clearly toward easing.
The September PCE price index rose 0.5% month over month and 3.6% year over year; core PCE rose 0.3% month over month and 3.1% year over year. Over the same period, nominal consumer spending grew 0.5%, while real spending grew by less than 0.1%. A large share of the increase in spending was absorbed by higher prices.
For businesses, this means revenue growth needs to be broken down into price and volume. If consumers’ purchasing power comes under pressure, companies may have to weigh price increases against sales volumes and profit margins.
On Friday, the 10-year U.S. Treasury yield fell to around 4.93%, yet tech stocks continued to decline, suggesting that valuation pressure had also extended to the delivery of earnings. Lower yields typically support valuations, but that support may be offset if expectations for cash returns fall at the same time.
To assess what comes next, the cost of capital and corporate earnings need to be considered together, rather than focusing on either variable alone.
V. What to watch this week: Earnings and employment will jointly test market expectations
Apple, Palantir, and AMD: watching end-market, application, and computing demand, respectively
According to the current schedule, Apple and Palantir will report results after the market closes on November 2, U.S. time.
For Apple, watch iPhone sales, services revenue, gross margin, and its outlook for the holiday quarter. After divergence emerged within tech stocks, operating data will show whether stable cash generation is enough to support valuations.
For Palantir, watch its U.S. commercial business, order conversion, and full-year guidance. Contract value, recognized revenue, and actual cash collection occur at different times. Whether broader customer adoption can generate sustainable revenue is more informative than simply an increase in product usage.
AMD has confirmed that it will report results after the market closes on November 3. Key items to watch include data center revenue, AI product deliveries, gross margin, and guidance for the next quarter. After Friday’s sharp volatility, the market needs actual delivery and earnings data to validate demand.
On Wednesday, investors can also watch companies such as AppLovin and Arm for additional signals on AI-related demand, spanning areas such as ad monetization, licensing, and royalties. Refer to company announcements for any changes to earnings dates.
Nonfarm payrolls: don’t focus only on the number of jobs added
The September JOLTS job openings report is due at 11 p.m. Beijing time on November 3; the preliminary third-quarter productivity and costs data at 9:30 p.m. on November 5; and the October nonfarm payrolls report at 9:30 p.m. on November 6.
Nonfarm payrolls should be assessed alongside the unemployment rate, wages, and historical revisions. If both employment and wages remain strong, inflation and interest-rate constraints may continue to draw attention. If the labor market cools moderately while unemployment remains stable, policy pressure may ease. If it weakens sharply, risks to both demand and earnings revisions should also be considered.
The U.S. midterm elections on November 3, U.S. time, may also affect expectations for taxes, fiscal policy, and regulation. But policy takes time to follow from election results, so it would be unwise to infer a definite stock-price direction directly from the outcome.
To judge whether the recovery can continue, the focus still needs to return to two questions: Have corporate earnings and cash returns improved, and can buying broaden and persist? A sharp decline in tech stocks does not automatically make them cheap; recent strength in banks and small-cap stocks also needs to be supported by operating performance. Aligning the reasons for holding positions with the indicators that will validate them can help reduce the risk of being caught out while chasing rallies or selling off.