US stocks opened higher on Monday as technology and artificial intelligence-related shares recovered from a difficult October, while falling oil prices improved investor sentiment ahead of a busy week of corporate earnings and the US midterm elections.
The Dow Jones was up 407 points while the S&P 500 gained 0.48%. The Nasdaq Composite advanced 0.69%.
The recovery followed a sharp sell-off last week, when concerns about the scale of AI investments and the returns they could generate weighed on major technology companies.
The Nasdaq-100 lost more than $2.5 trillion in market value during October and came close to entering correction territory.
The Nasdaq and S&P 500 recorded monthly losses, while the Dow gained nearly 2% as investors shifted towards more defensive sectors.
AI stocks recover after October sell-off
Most megacap technology and growth stocks traded higher on Monday.
SpaceX and Alphabet were among the early gainers with more than 1% gains.
Nvidia also edged 1.6% higher, helping lift technology-sector sentiment.
Intel fell another 2.78% after suffering its worst one-day decline since the 1980s on Friday.
The chipmaker had issued a weaker-than-expected fourth-quarter revenue forecast and said it did not expect to generate positive cash flow this year.
Investors have also been assessing concerns about slowing PC demand and the financial pressures associated with its manufacturing operations.
Apple shares edged 0.47% lower ahead of its quarterly results, scheduled for release after Monday’s closing bell.
AMD is also due to report earnings later this week.
Concerns about AI spending have intensified after reports that OpenAI reduced its latest funding-round target by $10 billion.
Separate reports indicated that Blackstone had told investors Anthropic might not secure an investment-grade credit rating following its planned initial public offering.
Investors are also questioning the growing use of debt to finance AI infrastructure, particularly as borrowing costs rise.
Oil prices fall as Iran talks lift sentiment
Falling crude prices provided another boost to risk appetite on Monday.
Brent crude futures declined around 5% to $106.63 a barrel, while US West Texas Intermediate futures dropped more than 6.4% to $97.44.
The decline followed reports of discussions between Iranian and Qatari officials over a potential agreement to end the US-Israeli war on Iran.
The talks raised hopes that disruptions to energy supplies from the Middle East could ease.
The pullback in oil prices helped support stock futures after energy-market concerns had contributed to market volatility in recent weeks.
In individual stocks, Estée Lauder fell 0.85% even after raising its annual sales and profit forecasts, citing resilient demand ahead of the holiday season.
Meanwhile, AT&T, Verizon and T-Mobile each fell following a report that SpaceX was in discussions to acquire EchoStar’s Boost Mobile wireless service or gain access to its network.
EchoStar shares rose 2%.
Midterm elections and earnings in focus
Investors are preparing for several potential market catalysts this week, including Tuesday’s US midterm elections, corporate earnings and the October employment report.
The elections will determine whether Democrats can gain control of Congress from Republicans.
Democrats are widely expected to win the House of Representatives, while control of the Senate remains uncertain.
The October nonfarm payrolls report is scheduled for Friday.
Economists polled by Dow Jones expect the US economy to have added 55,000 jobs during the month.
On the corporate earnings front, McDonald’s and Qualcomm are among the companies scheduled to report results this week.
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