The Dow Jones Industrial Average futures took a hit on Tuesday, sliding by 400 points, or 0.8%. This came as Apple shares saw a decline and oil prices surged. Investors were feeling jittery with the U. S. midterm elections looming, which saw S&P 500 futures dip 0.1%, though Nasdaq-100 futures managed a slight uptick of 0.3%.
Apple's stock tumbled 4% after it issued a disappointing margin forecast and reported lower-than-expected iPad sales in its fiscal fourth quarter. Meanwhile, oil prices were on the rise amid ongoing tensions in the Middle East. Brent crude went up by 1.7% to $106.54 per barrel, while West Texas Intermediate futures increased 2.2% to $98.53 per barrel.
In the prior trading session, tech-heavy Nasdaq Composite fell by 1.07%, and the S&P 500 saw a 0.51% drop as investors pulled away from tech stocks. On the other hand, the Dow gained about 214 points, or 0.41%.
With the midterm elections approaching, prediction markets indicated a 75% chance of Democrats securing control of the Senate. A Democratic sweep of both the House and Senate could lead to a sell-off in artificial intelligence stocks, even with President Donald Trump still in office. This shift could affect investigations and oversight in Washington, impacting sectors like defense, artificial intelligence, and healthcare.
Market strategist Ryan Detrick pointed out that although there is anxiety before elections, markets often stabilize afterward. Still, a significant win by either party could unsettle stocks due to potential changes in spending and power dynamics.
Tuesday was shaping up to be a hectic day for investors, with numerous companies, including Pfizer, Shopify, Eaton, and Marathon Petroleum, scheduled to release earnings before the market opened. Advanced Micro Devices and Super Micro Computer were expected to report later in the day. Economic data releases, such as the Job Openings and Labor Turnover Survey for September and factory orders, were also on the horizon.
Global Market Movements
Across Asia, markets mostly fell on Tuesday, driven by tech losses in South Korea and Taiwan. The Kospi dropped by 3.59% to 5,648.79, while the Taiwan Weighted Index also fell 3.59%, closing at 43,307.54. Mainland China's CSI 300 decreased by 0.2% to 4,008.87. Conversely, Australia's S&P/ASX 200 gained 0.34% to end at 8,886.8, and Hong Kong's Hang Seng Index was up 0.37% in its final hour of trading.
In Europe, markets opened lower with the Stoxx 600 index down 0.62%. Technology stocks were hit hard, falling 2.1%, while mining stocks dropped 2.2%. However, food and beverage and healthcare stocks showed resilience, each rising around 0.3%.
In the bond market, U. S. Treasury yields edged higher as voting began in the midterm elections. The yield on 10-year Treasurys, a key benchmark for mortgages and auto loans, rose slightly. The 30-year Treasury yield, influenced by geopolitical developments, increased by 1 basis point to 5.2815%, while the 2-year note held steady at 4.5915%.
Shares of Bayer surged by as much as 5.6% after the company reported better-than-expected quarterly results and raised its full-year guidance. Bayer's performance was driven by its pharmaceutical division, with sales of prostate cancer drug Nubeqa and kidney medicine Kerendia exceeding expectations. Bayer's shares have risen about 42% this year as the company addresses U. S. litigation over its Roundup weedkiller.
In Switzerland, the annual inflation rate rose to 1.5% in October, higher than the expected 1.3%, due to increased costs of heating oil, petrol, and diesel. The Swiss franc strengthened by 0.2% against the U. S. dollar.
Meanwhile, energy company Drax Group announced plans to develop an artificial intelligence data center in North Yorkshire, England, in partnership with Brookfield and Radiant. Drax shares rose 8.2% following the announcement.
European semiconductor stocks were affected by a global tech sell-off, with ASML, ASMI, STMicroelectronics, and Infineon Tech all experiencing declines. HSBC's Willem Sels noted that while current earnings remain strong, the mismatch between current spending and future revenues in the AI sector is a typical challenge for new technologies.
In the automotive sector, German company Schaeffler announced plans to cut 3,460 jobs and close five sites across Europe, with the majority of cuts occurring in Germany.
