Oil plunges on Iran talks as tech stocks fall again
Lumentum fell 18.6% because an all-stock bid is worth less than it was on Oct. 28, Oracle filed to sell $20 billion of stock and bonds, and IDEXX rose 21.8%.
Key takeaways
West Texas Intermediate, the U.S. crude benchmark, settled at $96.46 a barrel on Monday, down 7.4%, its biggest daily loss since July 27, after the United States and Iran signaled they were open to a deal, CNBC reported.
Technology stocks fell again. The Nasdaq Composite closed down 1.1% after a 2.9% drop on Friday. The Dow Jones Industrial Average closed up 0.4%, and the S&P 500 closed down 0.5%.
President Donald Trump told reporters Iran wants to "make a deal and that could happen." Iran's president, Masoud Pezeshkian, said Tehran is seeking to resolve problems through dialogue, according to the country's state news agency.
The drop came a day before U.S. midterm elections, in the eight-month war the United States and Israel have been fighting against Iran. Crude gained more than 10% in October, CNBC said, as the market priced in the risk of a major military escalation after the vote.
Ryan McKay, director of commodity strategy at TD Securities, said much of the recent gain in crude was a risk premium ahead of a possible escalation. He does not expect diplomacy headlines alone to erase that premium while the war has no concrete end and attacks on tankers continue.
State Street Energy Select Sector SPDR ETF XLE closed down 4.0%, a smaller move than crude. U.S. Global Jets ETF JETS closed up 4.2%. Delta Air Lines rose 4.1%, and United Airlines rose 4.8%.
The day's losses were in the largest companies. Invesco S&P 500 Equal Weight ETF RSP, which gives each company the same weight, rose 0.76%. State Street SPDR S&P 500 ETF SPY, which weights companies by size, fell 0.48%.
The typical company in the S&P 500 rose, and the largest ones fell. That is why the Dow rose and the Nasdaq fell.
Invesco QQQ Trust, Series 1 QQQ fell 1.4%. It holds the Nasdaq-100, so it caught that same decline in the largest technology companies.
Airlines and equal-weight gained as energy and QQQ fell
Friday's drop followed disappointing results from Alphabet, Amazon and Intel, Charles Schwab said. On Monday, investors kept moving out of technology and scrutinizing companies tied to the artificial intelligence buildout, CNBC reported.
Intel fell another 8.8%. Friday's 29% drop left the stock down 45% in October, its worst month on record, CNBC said, citing FactSet.
Marvell Technology agreed on Monday to buy Lumentum, an optical components maker, for stock. Lumentum stockholders are to receive 4.5 Marvell shares for each Lumentum share they own.
Marvell said that package was worth $1,132 a share at the Oct. 28 closes, a premium of 23.9% and an implied enterprise value of $115 billion. The company said Oct. 28 was the last trading day before deal speculation began.
Bloomberg reported after that close that Marvell was nearing an all-stock deal. By Monday's close, Marvell was down 32% from Oct. 28, and the same 4.5 shares were worth $771, not $1,132.
Lumentum fell 18.6%, and Marvell fell 12.7%. Charles Schwab's morning note said there was disappointment that the deal was all-stock. Roundhill Photonics & Optics ETF LYTE, which holds optics companies including Lumentum, fell 9.2%.
Lumentum closed at $684.40, $87 below the Marvell shares it is to receive.
The all-stock bid fell with Marvell
The companies do not expect the deal to close until the first half of 2028, and it still needs approval from both companies' shareholders and from regulators.
Oracle fell 8.9% after filing to sell $10 billion of common stock and $10 billion of senior notes. The company said the proceeds are for general corporate purposes, which may include capital spending, debt repayment and future investments.
At an investor day last week, Oracle limited additional capital-market funding for the fiscal 2027 to 2030 investment cycle to that $20 billion, CNBC reported. The same report said Oracle's stock and bonds have been under pressure over the debt taken on to fund AI infrastructure.
"This seems to be exactly what they previewed," said Rob Oliver, senior research analyst at Baird. "So I'm not sure why the market is freaking about it."
IDEXX Laboratories rose 21.8%. The company, which makes diagnostic tests and software for veterinarians, reported third-quarter revenue of $1.214 billion, up 10%, and diluted earnings of $4.01 a share, up 18%. It raised its 2026 earnings outlook to $14.96 to $15.16 a share, from $14.69 to $14.94, 25 cents a share higher at the midpoint.
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