By yourNEWS Media Newsroom
NEW YORK — The S&P 500 finished lower Monday, Nov. 2, as losses among major technology companies outweighed optimism over a sharp decline in oil prices, with investors weighing prospects for a U.S.-Iran peace agreement, corporate earnings and the congressional elections scheduled for Tuesday.
The benchmark S&P 500 declined 0.51% to 7,541.40, reversing an earlier gain of more than 1%. The technology-heavy Nasdaq Composite fell 1.07% to 25,164.32, while the Dow Jones Industrial Average advanced 0.41% to 51,983.98.
According to Reuters’ report on Monday’s trading session, the pullback in technology stocks overshadowed broader market gains fueled by hopes that negotiations between Washington and Tehran could ease disruptions to global energy supplies.
The Russell 2000 index of smaller companies declined 0.2% to 2,805.88.
Oil prices dropped sharply after Iran signaled renewed openness to diplomatic negotiations aimed at ending the eight-month conflict in the Middle East.
Brent crude, the international oil benchmark, fell approximately 7.6% as traders responded to reports of discussions involving Iranian officials and Qatari mediators. U.S. benchmark West Texas Intermediate crude also declined, retreating below $100 a barrel during the session.
Iranian President Masoud Pezeshkian said the country’s supreme leader had granted the government additional authority concerning peace negotiations, according to Iranian state media.
The announcement raised expectations that diplomatic progress could eventually restore commercial shipping through the Strait of Hormuz, a critical passage for global oil exports.
The conflict has restricted shipments from major Middle Eastern producers, keeping energy prices elevated and contributing to inflationary pressures.
A negotiated settlement could reduce the risk of further supply disruptions and potentially lower costs for gasoline, diesel, aviation fuel and other petroleum products.
However, no final peace agreement had been announced Monday, and significant disagreements remained between Washington and Tehran.
The possibility of renewed oil shipments nevertheless contributed to lower longer-term U.S. Treasury yields, reflecting expectations that easing energy costs could reduce inflation.
Falling Treasury yields can influence borrowing costs for households and businesses, although the effect depends on broader financial conditions and Federal Reserve policy.
The improvement in energy markets initially helped Wall Street recover part of the previous week’s technology-driven selloff.
Major stock indexes opened higher, and the S&P 500 gained as much as 1.1% before reversing direction.
According to the Associated Press’ closing market report, most stocks in the S&P 500 actually advanced Monday, but losses among several of the index’s largest technology companies pulled the overall benchmark lower.
Because the index is weighted by market capitalization, movements in companies such as Apple, Nvidia and Microsoft can have an outsized effect on its performance.
Technology shares remained under pressure following a difficult October, when investors raised concerns about valuations and the enormous amounts of capital being committed to artificial intelligence infrastructure.
Nvidia reversed an early gain and finished lower, contributing to the S&P 500’s decline.
Apple fell approximately 1.5% during regular trading as investors awaited its quarterly earnings announcement after the closing bell.
The iPhone maker’s results were expected to provide insight into consumer demand, pricing and the outlook for its latest smartphone products.
Apple subsequently reported stronger-than-expected quarterly results, supported by demand for its iPhone 18 Pro models and higher selling prices. Its shares were little changed in after-hours trading following the announcement.
The company’s performance is closely watched because of its substantial market value and influence on the major stock indexes.
Other technology companies experienced larger declines.
Oracle shares fell nearly 9% after the company disclosed plans to raise approximately $20 billion, prompting renewed concerns about financing requirements associated with artificial intelligence and cloud computing investments.
Marvell Technology declined approximately 13% after announcing a major acquisition, while Intel and Advanced Micro Devices also lost ground.
The selloff reflected investor concerns about the financial returns expected from increasingly expensive AI projects.
Technology companies have committed hundreds of billions of dollars to data centers, semiconductors, computing equipment and related infrastructure.
Those investments have contributed to strong earnings growth for some businesses, but investors have become more selective about companies’ spending plans and expected profitability.
The technology-heavy Nasdaq has experienced heightened volatility as markets reassess whether projected AI revenue growth will justify current valuations.
Despite Monday’s decline, analysts expect third-quarter earnings among S&P 500 companies to increase more than 30% compared with the previous year, with artificial intelligence-related businesses contributing substantially to that growth.
Corporate earnings therefore remain an important counterweight to concerns about slowing economic activity and elevated valuations.
Monday’s market movements also reflected changes in expectations for monetary policy.
Lower oil prices could ease some inflationary pressures, potentially influencing how the Federal Reserve evaluates future interest rate decisions.
However, policymakers must also consider wages, employment, consumer spending and inflation outside the energy sector.
The decline in Treasury yields suggested investors were reassessing some inflation risks, but it did not establish that the Federal Reserve would change rates at its next meeting.
Economic data released Monday showed continued improvement in American manufacturing activity.
The Institute for Supply Management’s manufacturing index rose to 55.5 in October, indicating expansion in the factory sector.
A reading above 50 signals growth, while a reading below 50 indicates contraction.
The improvement provided evidence of stronger industrial activity despite elevated energy prices and continuing uncertainty surrounding international trade and geopolitical developments.
Investors also monitored the approach of Tuesday’s U.S. midterm elections.
Voters will decide all 435 House seats and 35 Senate seats, determining whether Republicans retain their congressional majorities or Democrats gain control of one or both chambers.
The outcome will influence the legislative environment facing President Donald Trump during the final two years of his presidency.
Potential policy consequences include changes in congressional oversight, federal spending negotiations, tax legislation, trade policy and energy regulation.
Markets generally pay close attention to elections because shifts in congressional control can affect the likelihood of major legislative changes.
However, the financial consequences depend on the specific policies adopted rather than party control alone.
Investors were also assessing the possibility that election results in closely contested races might take additional time to determine.
Uncertainty over the congressional balance of power could contribute to short-term market volatility, particularly if several races remain unresolved after Election Day.
Monday’s trading followed a difficult final week of October.
On Friday, the S&P 500 fell 1.82%, while the Nasdaq dropped 2.86% as technology stocks experienced substantial selling pressure.
The Nasdaq recorded a particularly weak October, reflecting concerns about AI-related spending, company valuations and the sustainability of recent earnings growth.
Monday’s early rebound suggested that lower energy costs were providing some relief, but the reversal demonstrated that investors remained cautious about technology stocks.
Energy shares were among the weakest areas of the market as crude prices fell.
The S&P 500 energy sector declined approximately 4%, reflecting expectations that lower oil prices could reduce revenue and earnings for petroleum producers.
While lower crude prices can benefit consumers and fuel-intensive businesses, they can weigh on oil and gas companies’ financial performance.
Consumer discretionary and materials stocks were among the sectors posting gains Monday.
Companies dependent on transportation and consumer spending can benefit when energy costs decline because lower fuel prices may reduce expenses and leave households with more disposable income.
The relationship is not immediate, however, because retail gasoline prices generally respond to changes in wholesale fuel markets over time.
Global stock markets also reacted to the diplomatic developments.
European shares traded with limited overall movement as investors weighed the prospect of lower energy costs against continuing economic uncertainty.
Asian markets delivered mixed results, while currency and bond markets responded to changes in expectations for inflation and geopolitical risk.
The prospect of a U.S.-Iran agreement remains particularly significant for international investors because the Strait of Hormuz handles substantial volumes of globally traded petroleum.
Disruptions to that shipping corridor have affected energy-importing economies and businesses dependent on reliable fuel supplies.
An agreement restoring commercial traffic could help reduce transportation and insurance costs, although the timing and extent of any improvement remain uncertain.
According to Reuters’ international market coverage, investors entered Monday’s session focused on developments in the Middle East, corporate earnings and the approaching U.S. elections.
Those factors remained central throughout the trading day, even as the initial stock market gains faded.
The week’s economic calendar also includes the October U.S. employment report, scheduled for Friday.
Employment data will provide additional information about hiring, unemployment and wage growth, helping investors assess the strength of the economy and the potential direction of interest rates.
Combined with corporate earnings and election results, the report could influence financial markets during the remainder of the week.
Despite the latest decline, major U.S. stock indexes remain higher for the year.
The S&P 500 has gained approximately 10.2% since the beginning of 2026, while the Dow is up 8.2% and the Nasdaq has advanced 8.3%.
The Russell 2000 has risen approximately 13.1%.
Those gains illustrate that the market’s recent weakness follows a period of substantial appreciation, particularly among technology and artificial intelligence companies.
The S&P 500’s valuation has also declined during the latest selloff, falling to approximately 19 times expected earnings, according to Reuters.
That represents its lowest forward earnings multiple since 2023, although valuations remain sensitive to expectations for corporate profitability and interest rates.
Monday’s session ultimately demonstrated how competing economic developments can affect different parts of the market.
Falling crude prices provided relief from energy-driven inflation concerns and supported many stocks, while technology companies continued to face selling pressure over capital spending and valuations.
The Dow’s advance contrasted with losses in the S&P 500 and Nasdaq, underscoring the uneven nature of the trading session.
As markets prepare for Tuesday’s elections, investors will continue monitoring U.S.-Iran negotiations, corporate earnings and economic data for indications of how those developments may affect growth, inflation and financial conditions.
For now, the sharp drop in oil prices offers a potential source of economic relief, but unresolved geopolitical tensions and continued volatility in technology shares leave Wall Street facing an uncertain week.
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