The Nasdaq Composite and S&P 500 declined on Monday, with the Nasdaq falling 1.07% to 25,164.32 as investors pulled back from technology stocks amid ongoing concerns about AI spending and short-term market volatility. The S&P 500 slipped 0.51%, closing at 7,541.40, while the Dow Jones Industrial Average bucked the trend, gaining 213.67 points to finish at 51,983.98, largely supported by gains in more traditional sectors such as industrials and home improvement. Key tech companies like Nvidia and Meta Platforms saw shares fall about 1%, and Apple dropped nearly 2% ahead of its earnings report.

Notable market activity included Marvell Technology’s sharp drop of nearly 13% and Lumentum’s 18% slide after Marvell announced its purchase of Lumentum in a significant $115 billion deal focused on AI data center connectivity. Oracle’s shares also declined 8% following the company’s announcement of plans to sell $10 billion in common stock and $10 billion in bonds to fund its artificial intelligence buildout. Meanwhile, defensive sectors rallied, with Sherwin-Williams up almost 6%, and Home Depot advancing 3.6%, reflecting a rotation by investors into so-called "old economy" stocks after a tough October for the tech sector.

The broader market faced challenges from multiple fronts including the upcoming U.S. midterm elections, the volatile oil market, and inflation concerns. Oil prices dropped sharply amid hopes for renewed peace talks between the U.S. and Iran, with Brent crude falling more than 7% to $104.77 per barrel and West Texas Intermediate slipping to $96.46. The midterms, scheduled for Tuesday, are widely anticipated to shift control of the House of Representatives to the Democrats, while the Senate’s composition remains uncertain. Market strategists note that despite recent setbacks, the longer-term bullish outlook for stocks remains intact, though short-term momentum continues to be disrupted by global and economic uncertainties.

In other corporate news, Oracle was upgraded to overweight by Stephens, buoyed by expectations of double-digit growth driven by its cloud infrastructure projects. Amazon’s AI investments were also highlighted positively by PhillipCapital, which upgraded the stock on prospects for long-term market leadership despite near-term free cash flow pressures. Additionally, sectors outside technology experienced mixed outcomes with the European markets slipping early in the session and Asian markets closing mixed as investors balanced geopolitical developments and corporate earnings reports against macroeconomic data from global manufacturing activity and construction spending.