The S&P 500 rose 0.25% to 7,598.94 points on Monday, while the Nasdaq gained 0.10% to 25,462.99 and the Dow Jones Industrial Average advanced 0.94% to 52,258.77. The gains followed a difficult October for technology stocks and came as investors monitored developments in the Middle East and upcoming corporate results.
Brent crude prices fell after Iran indicated it was open to peace talks, raising optimism about a possible agreement with the United States. The prospect of reduced geopolitical pressure on energy markets also helped push longer-dated US Treasury yields lower. Oil prices had remained elevated during eight months of war in the region, contributing to inflation concerns.
Eight of the 11 S&P 500 sector indexes advanced. Consumer discretionary stocks led the gains with a 3.02% rise, followed by materials, which added 2.26%. The energy index fell 3.3%. Amazon rose almost 4%, while Tesla gained 1.8%.
Apple declined 2% ahead of its quarterly report after the closing bell. Investors were particularly focused on the impact of rising memory-chip costs. Palantir traded nearly flat before releasing its results, while AMD fell 4% ahead of its own report on Tuesday.
The market’s advance came after the Nasdaq lost 5.3% in October, including a sharp sell-off on Friday linked to concerns that heavy investment in artificial-intelligence infrastructure may be running ahead of near-term cash generation. Jake Dollarhide, chief executive of Longbow Asset Management, described Monday’s move as a “buy the dip” reaction but said investors remained concerned about the pace of AI spending.
Oracle fell 5.2% after regulatory filings showed that the cloud infrastructure provider plans to raise $20 billion through a debt and share offering. The move highlighted concerns that debt-financed investment could become more difficult to justify as borrowing costs increase.
Other AI and semiconductor stocks also weakened. Marvell Technology dropped 10% after announcing a planned $115 billion all-stock acquisition of optical-components maker Lumentum, including debt. Lumentum fell 16%, while Intel declined 6.3%, adding to its 29% drop on Friday after issuing a weaker revenue outlook and saying it did not expect positive cash flow this year.
Despite recent volatility, third-quarter earnings for S&P 500 companies are projected to increase by more than 30% from a year earlier, according to LSEG data, with AI-related companies accounting for a significant share of the growth. After the market’s recent decline, the index was valued at about 19 times expected earnings, its lowest level since 2023.
Investors were also preparing for Tuesday’s US midterm elections, which will determine whether Democrats can take control of Congress from President Donald Trump’s Republican Party. Polls pointed to a likely Democratic victory in the House of Representatives, while the Senate race remained less certain. Separately, data showed that US manufacturing activity improved in October amid solid domestic demand.
Advancing stocks outnumbered declining stocks in the S&P 500 by a 2.7-to-one ratio. The index recorded 34 new highs and no new lows, while the Nasdaq posted 94 new highs and 227 new lows.
Sources: Investing.com News.