Key Highlights

  • Truist Advisory Services strategist Keith Lerner sees potential downside of roughly 2% to 8% for technology from current levels, a call made on October 30, 2026, relevant to Technology Select Sector SPDR Fund (NYSEARCA:XLK).
  • Lerner said technology's decline of roughly 10% is not unusual for this Bull Market and that the weight of the evidence suggests the uptrend remains intact.
  • The Nasdaq Composite lost about 5.2% in October, its worst month since March 2025, while the S&P 500 fell about 1.8% on October 30 to 7,580.07.
  • Since October 2022 the S&P 500 has risen about 111%, technology about 230% and semiconductors more than 380%, so a pullback of 2% to 8% would leave large gains in place.

What Truist Said After the October 30 Selloff

Keith Lerner, chief Investment officer and chief market strategist at Truist Advisory Services, published his view on Friday, October 30, 2026, as technology shares absorbed a brutal session. Intel fell 28.58% after weak guidance, the Philadelphia Semiconductor index dropped 7.20%, and doubts about AI spending returns spread across large platforms. Lerner said investors want more validation that the AI trade is still intact. His estimate of roughly 2% to 8% further downside rests on historical pullbacks, valuation and technical support. That range matters for Technology Select Sector SPDR Fund (NYSEARCA:XLK), which holds the largest US technology companies in one basket, so it feels such calls directly.

Rotation, Valuation and the Mechanism

Lerner described October's weakness as a sharp rotation rather than broad selling. In a rotation, money leaves expensive growth shares and moves into cheaper areas, so index declines can look severe even while the market stays invested. He pointed out that technology now trades at a lower forward valuation than consumer staples and industrials, despite the strongest estimated Earnings growth for next year. That is the core of his argument: the sector fell on sentiment while expected profits did not fall. A cap-weighted sector fund such as Technology Select Sector SPDR Fund (NYSEARCA:XLK) can move sharply when a few giant holdings reprice together, which is why Volatility can exceed the broader market's.

Risks and What to Watch Next

A forecast range is not a floor, and the 2% to 8% estimate is measured from October 30 levels, so a further shock could break it. The week is crowded: Apple and Palantir report after the close on November 2, the US midterm elections take place on November 3, and the October jobs report arrives on November 6 at 8:30 a.m. ET, with Federal Reserve hike pricing in focus. Another cluster of earnings disappointments or a hotter Inflation print could extend the rotation. A rebound could also come quickly if AI customers reaffirm spending plans. None of this is investment advice, only context for the week ahead.

Where Things Stand

Truist sees limited further downside rather than a collapse: roughly 2% to 8% from October 30 levels, with the technology uptrend described as intact. The question is whether that is enough cushion, and the honest answer is that it depends on the week's catalysts. Valuation support is real because technology trades at a lower forward multiple than staples and industrials. Yet earnings from Apple and Palantir on November 2, the midterms and the jobs report could test the call. Technology Select Sector SPDR Fund (NYSEARCA:XLK) remains the clearest way to track that debate.