Tech drags the Nasdaq down 1.1% as oil sinks 7.6% on US-Iran talk hopes

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What happened today

The S&P 500 fell 0.5% (38.67 points) to 7,541.40, after being up as much as 1.1% early in the day. The Nasdaq Composite fell 1.1% to 25,164.32. The Dow rose 0.4% to 51,983.98.

Nearly seven in ten S&P 500 stocks rose; the losses were concentrated in AI and tech names, per AP. Reuters put the tech sector down 2.7% and energy down 4%, with consumer cyclicals up 2%.

Brent crude fell 7.6% to settle at $104.77 a barrel, and WTI fell 7.4% to $96.46. Kitco called them the largest daily percentage drops for both since July; Reuters put Brent's as its biggest fall since April. Spot gold rose $71.40 (1.84%) to near $3,945.80 an ounce in US trading, per Kitco.

The news, then the reaction

ISM manufacturing (October) — 9:00 AM CT

Before: The S&P 500 opened higher, carried by a global rally as oil prices eased.
The news: The ISM manufacturing index rose to 55.5 from 54.5 in September, above expectations of about 54.6 to 54.7 (Yahoo Finance and Kitco; neither named the poll). Prices paid eased to 75.2 from 77.9, and production rose to 59.0, its highest since November 2021. S&P Global's final manufacturing PMI came in at 54.9, down from 55.9 and below its 56.0 flash reading.
After: Stocks held their early gains after the release; the data did not change the direction of the morning. Our sources did not confirm a specific NQ or ES futures move tied to the minute of the release, so we are not reporting one.

Oil slides on US-Iran diplomacy hopes — around 1:15 PM CT

Before: Oil was already lower on reports that the US and Iran could move toward talks.
The news: Brent fell about 7.9% to below $105 and WTI about 7.5% to near $96 by 1:15 PM CT, per Yahoo Finance, after Axios reported that President Trump wants to give diplomacy with Iran another try. Reuters noted Trump said a deal "could happen," though he has previously signaled new attacks on Iran could follow the midterms.
After: Instead of extending the rally, stocks faded through the afternoon as the tech sell-off resumed, and the S&P 500 closed down 0.5% from an early gain of as much as 1.1%.

Apple earnings — after the close (3:00 PM CT onward)

Before: Apple closed down 1.8% at $338.32 in regular trading.
The news: Apple reported fiscal fourth-quarter revenue of $114.48 billion and earnings of $2.10 a share, above the $113.38 billion and $1.99 analysts expected, per Investing.com. iPhone revenue was $57.6 billion, up 17% from a year earlier. CFO Kevan Parekh guided to a December-quarter gross margin of 45% to 46%, and CEO John Ternus said, "What we're seeing with memory pricing right now is unprecedented."
After: Apple shares fell 2.8% to $328.85 in after-hours trading, per Investing.com.

Palantir also reported after the bell, with third-quarter revenue of $2.313 billion versus the $2.17 billion expected (Bloomberg data), and raised its full-year revenue outlook to about $8.53 billion, per Yahoo Finance. Palantir shares had gained about 3% in the regular session, per Reuters.

Why it moved

AI and tech stocks stayed under pressure after last week's sell-off, on worries that the hundreds of billions of dollars Big Tech is pouring into AI data centers won't yield enough profit to make it worthwhile, AP reported. Nvidia fell 1.3% after a 4.2% drop Friday, Marvell fell 12.7% after agreeing to buy Lumentum, and Lumentum fell 18.6%.

Cheaper oil helped companies with big fuel bills. United Airlines rose 4.8%, Southwest 3.6% and Carnival 4.2%. Idexx jumped 21.8% after beating forecasts and raising its 2026 outlook; Marriott rose 4.3%.

The AI trade has faltered mainly on worries that companies are borrowing too much to fund a spending binge that may be too big, and an AI-driven stock rout could stir recession fears.^{Reuters columnist Jamie McGeever} Reuters also said the momentum faded in US hours as investors turned their attention to Tuesday's midterm elections.

For gold, Kitco said lower oil, lower yields and reduced inflation concerns helped bullion recover from Friday's selling, while the strong ISM report reinforced expectations that policy could stay restrictive for longer. Long-dated US Treasury yields fell about 4 basis points, per Reuters, with the 10-year moving toward 4.9%, per Kitco. The Fed held its range at 3.75%–4.00% last week, and CME Group's FedWatch showed 76% odds of a 25-basis-point hike in December, per Yahoo Finance.

"A macroeconomic model based on the historical relationship between interest rates, GDP and inflation suggests the Fed would need to raise the Fed funds rate by about 275 basis points, from roughly 4% today to 6.75% by the end of 2027, to bring CPI back to its 2% target."^{Apollo's Torsten Sløk}

Today was a split market rather than a broad sell-off: most stocks rose, but the largest index weights are tech companies, and their losses outweighed the gains elsewhere.

Tonight in Asia

Reserve Bank of Australia rate decision at 9:30 PM CT (2:30 PM AEDT). A 25-basis-point hike to 4.85%, an 18-year high and the fifth increase this year, is widely expected; a bank note quoted by ABC News (Australia) said about 80% of a hike was priced in. Governor Michele Bullock's press conference follows at 10:30 PM CT.
Hong Kong third-quarter GDP (advance estimate) and South Korea October inflation are also due, per Reuters.
Earlier, China's central bank said about 100 billion yuan ($15 billion) would be deployed under a new market support program, AP reported.

Tomorrow

Time CT	Event	Consensus
All day	US midterm elections	—
9:00 AM	JOLTS job openings (Sep)	not confirmed
9:00 AM	Factory orders (Sep)	not confirmed
After close	Earnings: AMD, Arista Networks, Shopify	not confirmed

What we're watching

Whether the gap between tech and the rest of the market holds, with AMD's results after Tuesday's close as the next test for chip stocks.
How markets react to the midterm results as they come in Tuesday night; we will report the market reaction only.
Whether oil holds today's drop, since Brent has swung between roughly $70 and $120 since just before the war with Iran began (AP), and what that means for inflation expectations ahead of Friday's jobs report.

The short version (the what and the result)

Tech fell again: the S&P 500 lost 0.5% and the Nasdaq 1.1%, while the Dow rose 0.4% and most S&P 500 stocks gained.
Oil had its sharpest one-day drop in months (Brent −7.6% to $104.77) on hopes for US-Iran talks.
Spot gold rose about 1.8% to near $3,946 but stayed under $4,000.
Apple beat revenue and earnings forecasts after the bell; its shares fell 2.8% after hours.