Dow Jones Industrial Average rises 0.41%, S&P 500 slips 0.51%; Oracle, Intel, and Marvell plunge
Palantir and Apple beat market revenue expectations in after-hours trading
Wall Street closed mixed on Nov. 2 (local time). While financial and consumer-discretionary issues showed relative strength, technology stocks came under pressure due to growing financial burdens from artificial intelligence (AI) infrastructure investments and lingering concerns over semiconductor earnings. Although major indices opened higher, heavy selling centered on tech shares pushed the Nasdaq and S&P 500 into negative territory.
The Dow Jones Industrial Average finished up 0.41% at 51,983.98. In contrast, the S&P 500 declined 0.51% to 7,541.40, and the tech-heavy Nasdaq Composite dropped 1.07% to 25,164.32.
The primary catalyst behind the tech sector's weakness was the financial burden associated with expanding AI infrastructure. Although major technology giants are pumping massive amounts of capital into data centers and semiconductor equipment, market caution is mounting over whether these firms can generate cash flows commensurate with their outlays. These concerns have persisted following the earnings releases of major tech companies late last month.
Notably, Oracle announced plans to raise a total of $20 billion through equity and debt offerings. The move, aimed at securing funds for massive investments including AI data center expansion, heightened concerns over financial strain and potential shareholder dilution, sending its shares down more than 8%.
In the semiconductor space, Intel slumped 8.80%, extending its sharp sell-off from the previous session. Intel tumbled roughly 29% on Oct. 30 after issuing fourth-quarter revenue guidance that fell short of market expectations when it reported earnings after the bell on Oct. 29. Furthermore, the company's projection that it would struggle to post positive free cash flow by 2027 weighed heavily on investor sentiment.
Other chipmakers followed suit. Micron Technology fell more than 5%, and AMD dropped by around 7%. NVIDIA and Broadcom also traded lower, as broad-based selling hit memory and data center-related stocks alongside AI chips.
Marvell Technology plummeted roughly 13% after announcing an agreement to acquire optical components maker Lumentum. The all-stock transaction values Lumentum at approximately $115 billion, including debt. While Marvell plans to leverage the deal to strengthen high-speed connectivity technology for AI data centers, the market remained wary of potential equity dilution resulting from the massive issuance of new shares.
Among mega-cap tech stocks, Apple declined in regular trading ahead of its earnings report, with the potential impact of rising memory chip prices on product costs and profitability drawing close attention. Microsoft, Meta, and Alphabet also traded lower. However, divergence within the tech sector was evident as Amazon and Tesla bucked the trend to finish higher.
Palantir traded lower during regular hours, but its third-quarter earnings report released after the close surpassed market expectations. Revenue surged 96% year-over-year to approximately $2.31 billion, while adjusted earnings per share (EPS) beat estimates at $0.44.
U.S. commercial revenue jumped 148% from a year earlier to $984 million, surpassing U.S. government revenue of $953 million. Palantir guided fourth-quarter revenue between $2.649 billion and $2.653 billion, while raising its full-year revenue outlook to a range of $8.53 billion to $8.534 billion.
Apple also topped market expectations in its financial results for the fourth quarter of fiscal 2026, released after the market close. Revenue rose about 12% year-over-year to $114.48 billion, topping the consensus estimate of roughly $113.4 billion. EPS of $2.10 also exceeded market forecasts, with iPhone sales reaching $57.58 billion. The gross margin came in at 47.9%, hitting the upper end of the company's 47% to 48% guidance range, though down from 50.1% in the previous quarter.
Financial stocks displayed relative strength. Visa and Mastercard advanced, alongside JPMorgan Chase and Berkshire Hathaway Class B shares. In the consumer space, Walmart, Home Depot, and McDonald's posted gains. The strength in financials, retail, and dining sectors contrasted with the weakness in tech, helping to underpin the Dow's advance.
International oil prices dropped sharply amid growing prospects for negotiations between the U.S. and Iran. As concerns over Middle Eastern crude supply disruptions eased, Brent crude settled down 7.6% at $104.77 a barrel. Energy majors ExxonMobil and Chevron declined accordingly.
Market participants are also keeping a close eye on the U.S. midterm elections scheduled for Nov. 3 local time, as the resulting balance of power in Congress could alter the trajectory of fiscal spending, tax codes, and industrial regulation policies.
Corporate earnings and AI investment efficiency are expected to remain key variables driving future tech sector trends. With Palantir and Apple reporting better-than-expected revenues, AMD is also on deck to report earnings on Nov. 3. Investors will be closely watching whether AI-related companies can secure revenues and cash flows that match their expanded capital expenditures.
