S&P 500 ends lower, Apple dips ahead of quarterly report

The S&P 500 closed lower on Monday as oil prices dropped due to hopes of a US-Iran peace deal. Apple shares fell before the company's quarterly earnings report, with the tech giant's stock down 1.5%. After trading, Apple reported results that exceeded expectations, mainly due to strong early demand for the iPhone 18 Pro and price hikes to counter rising memory-chip costs.

Amazon shares surged 2.2%, while Tesla rose 1%. The Dow Jones Industrial Average finished higher on Monday, while the S&P 500 and Nasdaq gained on the first day of November trading. Despite October's Nasdaq fall of 5.3% due to concerns over excessive AI infrastructure spending, the market rebounded. Longbow Asset Management's Jake Dollarhide cautioned that investors should be wary of AI-related companies spending too much, as there is a point where additional expense does not generate extra shareholder value.

The S&P 500 fell 0.51% to 7,541.40 points, the Nasdaq dropped 1.07% to 25,164.32 points, and the Dow Jones rose 0.41% to 51,983.98 points. Seven of the 11 S&P 500 sector indexes rose, with consumer discretionary gaining 2.25% and materials up 1.83%. The energy index fell 4%, and trading volume on US exchanges was relatively high at 18.8 billion shares.

Oracle shares plummeted almost 9% after announcing a US$20 billion debt and share sale, reflecting investor worries about the feasibility of debt-funded spending amid rising interest rates. AI-focused companies faced uncertainty following Anthropic's amended IPO filing, which revealed a shrinking net loss and revenue growth ahead of a possible listing.

Marvell Technology declined 13% following its US$115 billion all-stock acquisition of optical components maker Lumentum, while Intel fell 8.8%, adding to its 29% drop on Friday after reporting a quarterly revenue forecast below market estimates and a lack of positive cash flow expectations for the year. Palantir fell 3.1% ahead of its quarterly report, and AMD slipped 7.5% before its earnings report on Tuesday.

S&P 500 third-quarter earnings are expected to increase by more than 30% year-over-year, largely driven by AI heavyweights, with the index currently valued at around 19 times expected earnings, its lowest valuation since 2023.