S&P 500 falls 0.5% as tech losses outweigh oil’s 7% drop
Most S&P 500 stocks rose as crude fell on U.S.-Iran diplomacy hopes, but AMD, Microsoft and Oracle slid. Marvell agreed to buy Lumentum, and Apple beat estimates after the close.
Key takeaways
Most stocks rose on Monday with falling oil prices. But the S&P 500 still finished down 0.5%. The Nasdaq composite fell 1.1%, a third straight decline, while the Dow rose 0.4%.
Tuesday is a big news day: Voters choose a new Congress in the U.S. midterm elections, and Advanced Micro Devices, which fell 7.5% on Monday, reports quarterly results after the close. The October jobs report is due Friday.
A few large stocks led the decline
The drop was a matter of weight. The Invesco S&P 500 Equal Weight ETF RSP, which gives each S&P 500 company the same say, rose 0.8%. The Associated Press said a majority of stocks climbed.
Eight of eleven sectors rose as energy and technology fell
Microsoft, Apple, Advanced Micro Devices, Nvidia and Micron were the five largest drags on the State Street SPDR S&P 500 ETF SPY. Together they subtracted about 0.6 percentage point, more than the fund's own 0.5% decline.
Five stocks subtracted 0.6% from SPY
Microsoft fell 2.8% and Apple fell 1.8%. Advanced Micro Devices fell 7.5%, and Micron fell 5.8%. Nvidia finished down 1.3%.
Technology stocks extended last week’s selloff. Oracle fell about 8% after it said it plans to sell $10 billion of stock and $10 billion of bonds to pay for its artificial intelligence buildout, CNBC reported. Nvidia swung from an early gain to a loss, the Associated Press reported.
The State Street Technology Select Sector SPDR ETF XLK fell 2.9%, a third straight loss, after a 4.9% drop on Friday. The Invesco QQQ Trust, Series 1 QQQ, which tracks the Nasdaq-100, fell 1.4%, a third straight loss of its own.
XLK’s third straight loss, after Friday’s 4.9% drop
- XLK · +91.2%
- QQQ · +93.9%
Oil falls 7.4% on diplomatic hopes
West Texas Intermediate, the U.S. crude benchmark, settled down 7.4% at $96.46 a barrel, its biggest daily loss since July 27, CNBC reported. Brent, the international benchmark, settled down 7.6% at $104.77.
CNBC tied the drop to hopes of a diplomatic opening in an eight-month war. CBS News reported that the war was sparked by U.S. and Israeli strikes on Iran.
President Donald Trump told reporters that Iran wants to "make a deal and that could happen," CNBC reported. Iran's president, Masoud Pezeshkian, said Tehran is seeking to resolve problems through dialogue, CNBC reported, citing state media.
Ryan McKay, director of commodity strategy at TD Securities, told CNBC that much of oil’s recent gain was a risk premium, the extra amount buyers pay because of the chance that supplies will be disrupted. He said diplomacy headlines alone would not erase that premium while the war has no clear end and tanker and Houthi attacks continue.
Energy shares fell, causing the State Street Energy Select Sector SPDR ETF XLE to fall 4.0%.
USCF's United States Oil Fund USO fell 7.1%, just inside the 7.4% drop in the crude futures it is built to track.
** Marvell Aquires Lumentum
Marvell agreed on Monday to buy Lumentum in an all-stock deal, giving Lumentum holders 4.5 Marvell shares for each share they own. The companies put the deal’s enterprise value, which counts debt as well as stock, at $115 billion, or about $1,132 per Lumentum share. That was a 23.9% premium to the Oct. 28 closing prices, the last before Bloomberg reported the talks. Bloomberg valued the equity at about $102.6 billion. The companies expect to complete the deal in the first half of 2028.
Both stocks fell. Marvell dropped 12.7% to $171.41, and Lumentum dropped 18.6% to $684.40. Because Lumentum holders will be paid in Marvell stock, the offer’s value falls with Marvell’s share price. At Monday’s close, 4.5 Marvell shares were worth about $771, roughly 13% more than Lumentum’s closing price and about a third less than the announced $1,132.
Apple beats estimates in post-close announcement
Apple shares fell 1.8% in the regular session and slipped about 1% in after-hours trading as it released its quarterly earnings report, Reuters reported
September-quarter revenue was a record $114.5 billion, up 12% from a year earlier, and diluted earnings were $2.10 a share, up 14%, the company said. The $2.10 included 5 cents from tariff refunds. Without that, earnings were $2.05 a share, still above the $1.99 estimate.
The data firm LSEG compiled that $1.99 estimate and a revenue estimate of $113.39 billion. CNBC published both figures before the results.
The report was Apple's first earnings report under new CEO John Ternus, who succeeded Tim Cook on Sept. 1.
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