On Monday, the three major US stock indexes surged early but faded into the close, with a fresh selloff in technology shares as investors assessed a week packed with another round of earnings, the midterm elections and a key employment report.
The Dow Jones Industrial Average rose 213.67 points, or 0.41%, to 51,983.98; the S&P 500 fell 38.67 points, or 0.51%, to 7,541.40; and the Nasdaq Composite dropped 272.68 points, or 1.07%, to 25,164.31.
Chip stocks broadly declined, with the Philadelphia Semiconductor Index down 3.37%. Cerebras dropped 11.7%, Intel fell nearly 9%, while Western Digital, AMD and Seagate Technology each lost more than 7%, and SanDisk slid over 6%. Nvidia and Meta Platforms both shed 1%. Apple closed nearly 2% lower; the company was due to report earnings after the closing bell. Marvell Technology plunged nearly 13% and Lumentum fell 18% after the two companies announced that Marvell would acquire Lumentum for $115 billion. Oracle also fell 8% after saying it plans to sell $10 billion in common stock and $10 billion in bonds to fund its AI buildout.
After an AI-driven selloff sent the Nasdaq Composite down 5.2% in October, investors continued to scrutinize AI-buildout-related stocks, with money steadily exiting the technology sector. "The longer-term bullish narrative for stocks may have taken some hits over the past few weeks, but it remains intact," said Chris Larkin, managing director of trading and investing at E-Trade. "The challenge is near-term momentum — stringing together a few days that aren't interrupted by surging oil prices, worries about AI spending, inflation or geopolitics."
The US midterm elections will be held on Tuesday, with Democrats expected to win control of the House while control of the Senate remains uncertain. Oil prices plunged after reports that the US and Iran are seeking a diplomatic path to end the Middle East war. At the close, the December light sweet crude futures contract on the New York Mercantile Exchange fell $7.66 to settle at $96.46 a barrel, a drop of 7.36%; the January Brent crude futures contract in London fell $8.66 to settle at $104.77 a barrel, a decline of 7.63%.
Cryptocurrencies were hit after Binance suffered a $6.3 billion hack, with Bitcoin falling 1% to below $77,000 per coin. On the economic data front, recent surveys showed US manufacturing expanded in October while inflationary pressures persisted. Several labor market data points are due over the rest of the week, culminating in the government's October nonfarm payrolls report on Friday.
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