US stocks ended mixed on Monday as technology shares gave up earlier gains, extending pressure on the sector amid concerns about artificial intelligence spending and returns on investment.
The Nasdaq Composite fell 1.07%, while the S&P 500 declined 0.50%.
The Dow Jones Industrial Average outperformed, rising 0.43%.
The Nasdaq and S&P 500 had climbed as much as 1.4% and 1.1%, respectively, during the session before reversing course.
The session followed a difficult October for technology shares.
The Nasdaq fell 5.3% during the month, its worst monthly performance since March 2025, as investors questioned whether major technology companies’ investments in AI infrastructure were translating into sufficient cash generation.
Technology stocks retreat as AI spending concerns persist
Several major technology stocks ended lower. Nvidia and Meta Platforms declined 0.5% and 0.7%, respectively, while Apple fell around 2% ahead of its quarterly earnings report.
Chipmakers and companies linked to AI infrastructure also faced selling pressure.
Marvell Technology dropped approximately 12%, while Lumentum fell 18% after announcing a $115 billion all-stock acquisition agreement, including debt.
Oracle shares declined 8% after the company disclosed plans to raise $20 billion through a combination of common stock and bonds to finance its AI expansion.
The proposed fundraising added to investor concerns about the amount of debt and equity financing required to support infrastructure spending.
Intel also remained under pressure after falling 29% on Friday.
The company had forecast quarterly revenue below market expectations and said it did not expect positive cash flow this year.
Palantir and AMD shares declined ahead of their quarterly results, with AMD scheduled to report on Tuesday.
Despite the recent weakness, third-quarter S&P 500 earnings were on track to increase by more than 30% year over year, according to LSEG data.
AI-related companies accounted for a substantial portion of the expected growth.
Dow outperforms as investors rotate into other sectors
The Dow’s gains reflected stronger performance among companies outside the technology sector.
Sherwin-Williams rose 5.9%, while Home Depot advanced 3.63%.
Honeywell International, 3M and Boeing also gained more than 2% each.
The performance extended a broader rotation into more defensive and traditional industries.
During October, the Dow gained nearly 2%, supported by interest in sectors such as healthcare, while the Nasdaq and S&P 500 recorded monthly declines.
Amazon and Tesla also advanced on Monday, providing some support to the broader market.
Following the recent pullback, the S&P 500 was valued at approximately 19 times expected earnings, its lowest valuation since 2023.
Oil prices fall as investors await US midterm elections
Oil prices dropped sharply amid renewed hopes of progress towards a diplomatic agreement between the US and Iran.
Brent crude futures fell 7.63% to settle at $104.77 a barrel, while US West Texas Intermediate futures declined 7.36% to $96.46.
US Secretary of State Marco Rubio said President Donald Trump had not made a decision about attacking Iran and that Washington preferred a peaceful resolution.
Iranian state media also reported that the country’s foreign minister indicated an agreement was possible if the US demonstrated goodwill.
Lower oil prices helped ease some concerns about inflation and the potential impact on interest rates.
Longer-dated US Treasury yields also moved lower.
Investors are now turning their attention to Tuesday’s US midterm elections and upcoming employment data.
The elections will determine control of Congress, with polls indicating that Democrats could gain the House of Representatives, while the Senate outcome remains uncertain.
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