US stocks opened higher on Monday, with the Dow Jones Industrial Average climbing 407 points as technology and AI-related shares bounced back from a difficult October. The S&P 500 advanced 0.48%, while the Nasdaq Composite rose 0.69%, helped by a pullback in oil prices that eased investor concerns ahead of a busy week of earnings and the US midterm elections.
The rebound follows a sharp sell-off last week, when worries about the scale of AI investments and their potential returns weighed on major tech companies. The Nasdaq-100 lost more than $2.5 trillion in market value during October and nearly entered correction territory. While the Nasdaq and S&P 500 posted monthly losses, the Dow gained nearly 2% as investors rotated into more defensive sectors.
AI stocks recover after October sell-off
Most megacap technology and growth stocks traded higher on Monday. SpaceX and Alphabet were among the early gainers, each rising more than 1%. Nvidia also edged up 1.6%, helping lift sentiment across the technology sector.
Intel, however, extended its losses, falling another 2.78% after suffering its worst one-day decline since the 1980s on Friday. The chipmaker issued a weaker-than-expected fourth-quarter revenue forecast and said it did not expect to generate positive cash flow this year. Investors are also assessing concerns about slowing PC demand and the financial pressures tied to its manufacturing operations.
Apple shares slipped 0.47% ahead of its quarterly results, due after Monday's closing bell, while AMD is scheduled to report later this week. Concerns about AI spending have intensified after reports that OpenAI reduced its latest funding-round target by $10 billion. Separate reports indicated that Blackstone had told investors Anthropic might not secure an investment-grade credit rating following its planned initial public offering. Investors are also questioning the growing use of debt to finance AI infrastructure, particularly as borrowing costs rise.
Oil prices fall as Iran talks lift sentiment
Falling crude prices provided another boost to risk appetite on Monday. Brent crude futures declined around 5% to $106.63 a barrel, while US West Texas Intermediate futures dropped more than 6.4% to $97.44. The decline followed reports of discussions between Iranian and Qatari officials over a potential agreement to end the US-Israeli war on Iran, raising hopes that disruptions to energy supplies from the Middle East could ease.
The pullback in oil prices helped support stock futures after energy-market concerns had contributed to market volatility in recent weeks. In individual stocks, Estée Lauder fell 0.85% even after raising its annual sales and profit forecasts, citing resilient demand ahead of the holiday season. Meanwhile, AT&T, Verizon, and T-Mobile each fell following a report that SpaceX was in discussions to acquire EchoStar's Boost Mobile wireless service or gain access to its network. EchoStar shares rose 2%.
Midterm elections and earnings in focus
Investors are preparing for several potential market catalysts this week, including Tuesday's US midterm elections, corporate earnings, and the October employment report. The elections will determine whether Democrats can gain control of Congress from Republicans. Democrats are widely expected to win the House of Representatives, while control of the Senate remains uncertain.
The October nonfarm payrolls report is scheduled for Friday, with economists polled by Dow Jones expecting the US economy to have added 55,000 jobs during the month. On the corporate earnings front, McDonald's and Qualcomm are among the companies scheduled to report results this week.
This article is for informational purposes only and does not constitute financial advice.
