Dow alone rises as Nasdaq falls for third straight day; Apple slips after hours

Dow alone rises as Nasdaq falls for third straight day; Apple slips after hours
US Stocks Morning Brief | Tuesday, 3 November 2026 (Hong Kong time; cash market close was Monday, 2 November, US Eastern time)

On Monday, the Dow rose 0.41% to 51983.98 points, the S&P 500 fell 0.51% to 7541.40 points, the Nasdaq fell 1.07% to 25164.32 points, and the equal-weight S&P ETF (RSP) rose 0.77% to $219.98 (Barron's) (Reuters, republished). The 10-year US Treasury yield was about 4.89%; WTI crude was about $95.73 a barrel, down about 8% on the day; gold was about $3957 an ounce, up about 1.5%; and the US dollar index edged lower to about 101.8 (Barron's) (Reuters, republished).

Market themes
Monday's market presented a seemingly contradictory picture: Oil's 8% plunge in a single day should have benefited risk assets, but renewed doubts about the AI bill pushed them back down in the afternoon—the three major indexes opened higher and closed below their opening levels, the Nasdaq fell sharply for a third straight day, while the Dow and the equal-weight index ended higher. This suggests Monday's trading was not about whether oil had fallen, but whether there was a new answer to the old question of how much AI will cost and how long it will take to pay off. Marvell and Oracle drove the bill higher on the same day with a major deal and a large financing, respectively; chip stocks then led losses, and money moved out of technology stocks into consumer, financial and materials stocks (Barron's) (Reuters). The rise in the equal-weight index alongside a fall in the capitalization-weighted index marks the dividing line: this is still a reckoning concentrated within technology stocks, not a market-wide surrender—but unless Apple's and Palantir's after-hours results make clear whether they are worth the price, pressure will remain at Tuesday's open.

I. Oil plunges: Diplomatic hopes outweigh supply fears, but divisions remain

• Oil posted its largest one-day decline in months: WTI fell about 8% to $95.73 a barrel, and Brent slipped below $104 a barrel. A Reuters column said it was Brent's largest one-day fall since April and WTI's largest since July (Barron's) (Reuters, republished). The fall in oil reflects a retreat in the war premium, not demand—and how quickly that premium fades depends on negotiations, not inventories.
• Diplomatic signals drove the decline. Reuters reported that Iranian negotiators had held three consecutive days of talks with Qatari mediators in Doha and were reportedly preparing a proposal that could reopen the Strait of Hormuz within two days of an agreement with Washington. US Secretary of State Rubio said on Saturday that Trump had not decided whether to launch new strikes and preferred a diplomatic resolution to the conflict (Reuters). A Bloomberg market wrap also noted early Monday that reports said Trump wanted to give diplomacy more time after Tuesday's midterm elections before deciding whether to resume strikes on Iran (Bloomberg, republished).
• Reuters cautioned, however, that major disagreements remained: Iran's nuclear programme, sanctions relief and broader security issues had yet to be resolved, and energy markets would remain tense (Reuters). Talks taking place, and proceeding more actively than last week, were enough to send oil down 8%, but not enough to convince the market that the risk had passed—one reason technology stocks did not rise alongside oil's decline.

II. Bonds, the dollar and commodities: Long-term yields retreat; gold rebounds from a one-year low

• Monday's bond-market signal was one of relief, but not a change in direction: the 10-year US Treasury yield fell about 3.5 basis points to around 4.89%, with long-term yields declining and the curve flattening. The plunge in oil eased inflation worries and gave the bond market breathing room. Reuters' trading-day wrap said long-term US yields fell about 4 basis points, marking the curve's first flattening in four days (Reuters, republished) (Bloomberg, republished).
• Gold rebounded about 1.5% to around $3957 an ounce, still below the $4000 threshold; it had just fallen below $3900 last Friday to its lowest in more than a year (Reuters, republished). Gold's rebound was not a story of a return to safe havens, but of overly heavy selling last Friday: falling oil prices and yields, together with a softer dollar, gave gold a technical breather.
• The dollar edged lower, with the US dollar index at around 101.8; Reuters said a softer dollar was one of the common features of global markets on Monday (Reuters, republished). The dollar did not fall sharply, suggesting the market was not broadly betting on a return of risk appetite just because oil fell—money was shifting between sectors, not changing direction.

III. Stock and sector moves, including earnings: Chip stocks lead declines as consumer and financial shares support the Dow

• Sector divergence was the clearest evidence on Monday: the S&P 500 technology sector fell 2.66% and energy fell about 4%, while consumer discretionary rose 2.25%, materials gained 1.83% and financials climbed 1.76%; 7 of the 11 sectors rose (Barron's) (Reuters, republished). With 7 sectors up and 4 down, yet the index falling, this was a classic pattern of heavily weighted stocks dragging on the market: the largest technology stocks fell while gains were spread across the other sectors.
• Chip stocks continued to lead declines: Intel fell another 8.8% after plunging 28.6% last Friday, the Philadelphia Semiconductor Index dropped 3.37%, AMD fell about 7%, Micron about 6% and Nvidia about 1% (Barron's). Intel lost more than a third over two days, showing the market has not relaxed its standard of severely punishing weak guidance—this earnings season is punishing the future, not the past.
• A different group supported the Dow: Sherwin-Williams rose about 6%, Walmart and McDonald's each gained about 3%, and American Express and Visa also rose about 3%. The plunge in oil also lifted airline stocks, with United Airlines up about 5% and American Airlines and Delta each up about 4%; Amazon rose 2.2% and Tesla about 1% (Barron's) (Reuters, republished). Lower oil prices provide tangible cost relief for airlines and consumers but directly hurt energy stocks—Monday's sector map mirrored oil's decline.
• After-hours earnings were the first test ahead of Tuesday's open. Apple closed down about 1.5% and, after the close, reported revenue of $114.48 billion for the fourth quarter of fiscal 2026, up 12% year over year, and diluted earnings per share of $2.10, both above market expectations. iPhone revenue rose about 17.5% to $57.58 billion, a record for the quarter ending in September, while services revenue hit an all-time high of $31.57 billion (Reuters, republished) (Bloomberg, republished). Greater China revenue, however, rose 21% to $17.54 billion, still below market expectations of around $18.75 billion. About 1 percentage point of the 47.9% gross margin came from tariff refunds, as did about 5 cents of earnings per share (Bloomberg, republished). The makeup of Apple's results and the market's pre-open anxiety are two sides of the same coin: iPhone sales were strong and services hit a record, but China missed expectations and the gross margin depended on refunds for support—beating expectations does not mean a report is flawless, and the after-hours decline reflects the pricing of those flaws.
• Palantir fell 3.1% in premarket trading and, after the close, reported third-quarter revenue of $2.313 billion, up 96% year over year, and adjusted earnings per share of $0.44, both above expectations of approximately $2.18 billion in revenue and $0.41 per share. US commercial revenue rose 148% to $984 million, exceeding US government revenue of $953 million for the first time; the latter rose 96% year over year (Palantir earnings report, republished). The company also raised its full-year revenue guidance to about $8.53 billion and gave fourth-quarter revenue guidance of $2.649 billion to $2.653 billion (Palantir earnings report, republished). But the value of newly signed US commercial contracts grew only about 11%, and total contract value also grew far more slowly than revenue; the after-hours reaction was volatile (Palantir earnings report, republished). Palantir faces the same test as Apple: the revenue can be real, and so can the pace at which the order book is replenished—the market is now debating whether the latter can keep up with the former.

IV. AI news: Marvell's massive optics deal and Oracle's financing add to the bill

• Marvell announced an all-stock acquisition of optical components maker Lumentum at an enterprise value of about $115 billion. Lumentum shareholders will receive 4.5 Marvell shares for each share, and the deal is expected to close in the first half of 2028; after the announcement, Marvell fell about 13% and Lumentum about 19% (Barron's) (Reuters). Reuters said the deal combines two Nvidia-backed companies and highlights rapidly growing demand for optical hardware in AI data centers (Reuters). The buyer and the target both falling sharply on the same day suggests the market is growing less patient with buying growth using shares: even when the rationale is AI infrastructure, valuations must first be scrutinized.
• Oracle fell 8.8% as the company disclosed more details of its previously announced $20 billion financing plan: approximately $10 billion in shares and $10 billion in bonds to fund AI infrastructure construction (Barron's). Oracle's decline reflects a different version of the same logic as Marvell's: one is using shares to buy a company, the other is using shares and bonds to buy computing capacity—the market is discounting AI stories built on spending first and earning a return later.
• Manufacturing data did not add to the trouble for the AI narrative: the US ISM manufacturing PMI rose to 55.5% in October, above September's 54.5% and market expectations for no change. The production index rose to 59.0%, its highest since November 2021; however, the prices index remained as high as 75.2%, and 66% of respondent comments were negative, frequently citing price volatility, longer lead times, tariffs and the war with Iran (ISM). Manufacturing is expanding while sentiment is deteriorating—a microcosm of Monday's market: the numbers are decent, but nobody wants to pay a higher price for them.

V. Looking ahead (Hong Kong time)

• 3 November (Tuesday): US midterm election voting; 23:00: US JOLTS job openings for September; after the close (early morning on 4 November Hong Kong time): AMD, Arista and Super Micro report earnings (Barron's).
• 4 November (Wednesday): US ISM services PMI for October; McDonald's and Qualcomm report earnings (Barron's).
• 5 November (Thursday): Airbnb reports earnings.
• 6 November (Friday), 21:30: US nonfarm payrolls report for October (Bureau of Labor Statistics), the week's key economic release; Moderna reports earnings.
• Note: The US has switched to standard time. Regular US stock market trading hours are 22:30 to 05:00 the following day in Hong Kong time.