Monday saw declines for the Nasdaq Composite and S&P 500. The Nasdaq fell 0.6%, while the S&P 500 slipped 0.2%. Investors pulled back from technology stocks despite earlier gains where the Nasdaq and S&P 500 climbed as much as 1.4% and 1.1%, respectively. The Dow Jones Industrial Average went against the grain, rising 328 points, or 0.6%, thanks to strong performances in non-tech sectors.
Technology giants faced setbacks. Nvidia and Meta Platforms saw shares decline by 0.5% and 0.7%, respectively. Apple also felt the pressure, with its stock falling 2% ahead of its earnings report after the market closed. Marvell Technology and Lumentum experienced steeper declines, tumbling 12% and 18%, respectively, after the companies announced that Marvell is buying Lumentum in a $115 billion deal.
Traditional economy stocks helped lift the Dow. Sherwin-Williams and Home Depot posted gains of 5.6% and 3.3%, respectively. Honeywell International, 3M, and Boeing each rose by more than 2%.
Investors are bracing for a busy week ahead, with U. S. midterm elections and key jobs data looming. Chris Larkin, managing director of trading and investing at E-Trade, emphasized the market's resilience amid recent volatility, highlighting factors like fluctuating oil prices, AI spending concerns, and inflation.
Oil prices took a hit, with Brent crude dropping nearly 8% to around $104 per barrel. U. S. West Texas Intermediate futures fell over 7% to about $96. The decline was linked to hopes for renewed peace talks between the U. S. and Iran, as both countries showed willingness to address conflicts through diplomacy.
In corporate developments, Oracle revealed plans to raise $10 billion through common stock sales, alongside another $10 billion in bonds, to bolster its AI efforts. Oracle shares fell 8%, but analyst Brett Huff from Stephens upgraded the company to overweight, citing potential for growth in applications.
Loop Capital downgraded Reddit from buy to hold, citing pressures on referral traffic and concerns over Google's licensing agreement with the platform. Google's report of a sharp decline in core advertising revenues led to its biggest single-day stock drop.
September saw construction spending fall at its steepest rate since April 2020. The Commerce Department noted a 1.9% monthly decline, with residential spending dropping 5.5%, overshadowing a modest 0.6% rise in nonresidential outlays. This decline caught economists off guard, as they had expected a 0.4% increase.
In tech, Deutsche Bank returned to an overweight stance after previously downgrading to neutral. Analyst Parag Thatte observed the sector's performance is at the bottom of its long-term trend, suggesting potential for recovery.
The Institute for Supply Management reported an uptick in U. S. factory activity for October. Its manufacturing index rose to 55.5, surpassing expectations and indicating growth as production increased and order backlogs shrank.
Lastly, PhillipCapital upgraded Amazon to buy, boosting its price target to $330. Despite recent sell-offs, the firm expressed confidence in Amazon's AI investments, citing strong demand visibility and long-term benefits.
