AI summary
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US stocks fell on Monday, led by technology stocks, with prices falling more than 3%. Stocks like Apple, Intel and Oracle were under pressure as the market digested concerns about a sharp decline in oil prices, AI spending and midterm election uncertainties.
US stocks Four major indices were mixed on Monday (second), but Dow Jones had a slight risestamp 500 The index and Nasdaq lost their early gains and closed in the black. Chip stocks fell sharply again and the Philadelphia Semiconductor Index fell more than 3%. This shows that investors are continuing to pull money out of technology stocks and instead increasing allocation to other stocks in the market.
On the 2nd, the Dow Jones Industrial Average rose 213.67 points, or 0.41%, to close at 51,983.98 points; The S&P 500 index fell 38.67 points, or 0.51%, to 7,541.40; The Nasdaq index fell 272.68 points, or 1.07%, to close at 25,164.32.
The Philadelphia Semiconductor Index fell 360.47 points, or 3.37%, to 10,328.33.
Seven of the 11 S&P 500 sectors rose. Consumer discretionary shares rose 2.25%; Materials stocks also rose 1.83%. Energy stocks fell 4%.
Long-term US Treasury yields fell, Brent crude oil prices fell more than 8% to around $104 a barrel, and Iran signaled willingness to join peace talks. The war in the Middle East has been going on for eight months, keeping energy prices high and inflation rising.
Investment sentiment in AI-related companies remains fragile. Earlier, Anthropic’s updated IPO application documents revealed that the company’s net loss narrowed significantly in the third quarter and its revenue increased significantly, paving the way for its potential listing.
In terms of individual stocks,Huida (NVIDIA) and Meta shares fell 1%.
Apple’s share price closed nearly 2% lower after the bell before the company released its earnings report. The financial report was released after the market closed. Fourth-quarter revenue was US$114.48 billion, exceeding analysts’ estimates of US$113.39 billion. This was primarily due to strong initial demand for the iPhone 18 Pro series smartphones, as well as higher selling prices, which helped mitigate the impact of rising memory chip costs. However, its revenue forecast for the year-end shopping season failed to impress investors, and its share price fell more than 3% after hours.
Marvell shares fell nearly 13%, while Lumentum fell 18%. The two companies previously announced that Marvell would acquire optical component maker Lumentum in an all-stock deal that would have a total transaction value of approximately US$115 billion (including debt).
Intel fell 8.8%, extending Friday’s 29% loss. The company previously forecast quarterly revenue would fall short of market expectations and said it did not expect to achieve positive cash flow this year.
Oracle’s share price also fell nearly 9%, mainly because the company said it planned to issue US$10 billion in common stock and US$10 billion in bonds to raise funds to expand its artificial intelligence (AI) business. Investors are concerned that it may become harder to justify a company’s debt-financed spending as borrowing costs rise.
Amazon rose 2.2% and Tesla rose 1%.
Jake Dollarhyde, CEO of Longbow Asset Management, cautioned that investors are still concerned about the pace of AI spending. “Companies must realize that there are limits to the scale of their spending and the role of these spending in enhancing shareholder value. At a certain level, spending will no longer bring additional value and will only increase costs.”
Following Wall Street’s recent decline, the S&P 500 is currently trading at about 19 times forward earnings, its lowest valuation since 2023.
Investors are also focused on the US midterm elections on Tuesday. The election will determine whether Democrats can wrest control of Congress from Republicans led by President Trump.
