The S&P 500 climbed on Monday as oil prices tumbled on optimism about a potential US-Iran peace agreement, while Apple shares declined ahead of the iPhone maker's quarterly report and investors awaited Tuesday's US midterm elections.
Longer-dated US Treasury yields dipped and Brent crude prices LCOc1 fell as Iran indicated it was open to peace talks after eight months of war in the Middle East that have kept energy prices elevated and stoked inflation.
Amazon AMZN.O rallied almost 4%, while Tesla TSLA.O climbed 1.8%.
Apple AAPL.O declined 2% ahead of its quarterly report after the bell, with investors focused on rising costs for memory chips.
Gains in Wall Street's first day of November trading followed a bruising October. The Nasdaq fell 5.3% for the month following a selloff on Friday related to worries that massive spending on AI infrastructure is outpacing near-term cash generation.
Monday's gains reflected a "buy the dip" reaction, said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma. He warned that investors remain concerned about the pace of AI spending.
"Companies have to realize there's a limit to how much they spend and what it means in terms of enhanced shareholder value. At some point, there is no additional value-add, just expense," Dollarhide said.
Eight of the 11 S&P 500 sector indexes rose, led by a 3.02% rise in consumer discretionary .SPLRCD followed by a 2.26% gain in materials .SPLRCM. The energy index .SPNY dropped 3.3%.
The S&P 500 was up 0.25% at 7,598.94 points.
The Nasdaq gained 0.10% to 25,462.99 points, while the Dow Jones Industrial Average was up 0.94% at 52,258.77 points.
Oracle ORCL.N dropped 5.2% after regulatory filings showed the cloud infrastructure provider plans to raise $20 billion through a debt and share sale, highlighting investor concerns that debt-funded spending could become harder to justify as borrowing costs rise.
Sentiment toward AI-related companies remained shaky after an amended IPO filing showed Anthropic's net loss narrowed sharply in the third quarter, while revenue jumped ahead of a potential listing.
Marvell Technology MRVL.Otumbled 10% after the chipmaker said it is buying optical components maker Lumentum LITE.O in a $115 billion all-stock deal, including debt. Lumentum dropped 16%.
Intel INTC.O fell 6.3%, adding to a 29% drop on Friday after it forecast quarterly revenue below market estimates and said it did not expect positive cash flow this year.
Palantir PLTR.O was near flat ahead of its quarterly report after the bell.
Chipmaker AMD AMD.O fell 4% on the eve of its quarterly report on Tuesday.
S&P 500 third-quarter earnings are on track to climb over 30% year-over-year, with AI heavyweights accounting for much of that jump, according to LSEG data.
Following Wall Street's recent decline, the S&P 500 is valued at about 19 times expected earnings, its lowest valuation since 2023.
Investors were also focused on US midterm elections on Tuesday, which will determine whether Democrats can wrest control of Congress away from President Donald Trump's Republican Party.
Polls suggest Democrats are likely to win the House of Representatives. The outcome in the Senate was less clear. Republicans controlled both chambers of Congress during the first two years of Trump's latest term.
Meanwhile, data showed that US manufacturing activity picked up in October amid solid domestic demand.
Advancing issues outnumbered falling ones within the S&P 500 .AD.SPX by a 2.7-to-one ratio.
The S&P 500 posted 34 new highs and no new lows; the Nasdaq recorded 94 new highs and 227 new lows.
Reuters
