U.S. stock indexes lose momentum as tech and AI shares weigh on trading

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Stock indexes lose momentum

Highlights

Nasdaq Composite falls 1.07% and S&P 500 declines 0.51% after early gains evaporate, as investors trim tech positions ahead of the U.S. election.
Marvell drops 12.7% and Lumentum falls 18.6% after announcing a $115 billion all-stock M&A deal, with analysts highlighting dilution risks and cyclical timing concerns.
Oracle slides 8.8% after unveiling $20 billion capital raise for AI and cloud expansion, while Apple beats Q4 forecasts with 47.9% gross margins and $136.94 billion cash.

Tech retreat and election caution pressure session

As reported by Cboe Global Markets, trading starts with a rebound from Friday’s selloff but fades by the close as investors pull back from technology exposure and await more clarity from the election.

The Financial Times says investors are bracing for a highly consequential midterm vote and are pausing new positions until results provide direction on issues ranging from statewide AI policy to federal spending. By the close, the Nasdaq Composite gives up an early 1.4% gain to fall 1.07%, while the S&P 500 Index turns a 1.1% advance into a 0.51% decline. The Dow Jones Industrial Average also loses momentum but still finishes up 0.41%.

Energy shares also weaken after oil prices drop on hopes that Iran peace talks may gain traction despite reports of difficult weekend negotiations. Comments from Iran’s president about granting his government limited authority to pursue further dialogue with the U.S. help push WTI crude down 7.18% into the mid-$96-per-barrel range. The Cboe Volatility Index dips to 18 intraday before ending nearly 11% higher at 21.54.

AI spending, M&A and financing face investor scrutiny

Marvell and Lumentum shares fall after confirming last week’s market talk that Marvell is buying the optical technology company for $115 billion in an all-stock transaction. Marvell says optical technologies are becoming central to high-speed AI data transmission and reflect a broader architectural shift toward optical connectivity.

Investors and analysts remain wary of the timing of the deal, potential stock dilution and the broader pullback in enthusiasm for AI-linked spending. Barron’s reports that the acquisition is viewed as a major bet on AI demand, while a Morgan Stanley analyst questions the appeal of pursuing such a large purchase at what may be peak cyclical conditions. Marvell drops 12.7% and Lumentum falls 18.6%, with the deal also facing regulatory review that may take 14 to 20 months.

Oracle loses 8.8% after disclosing in a regulatory filing plans to raise $20 billion through bond and share sales, mostly to support AI and cloud infrastructure expansion. Intel also falls 8.8% and is down nearly 36% over the last six months, while Nvidia slips 1.26% and Advanced Micro Devices declines 4.47%. After the bell, Apple reports fourth-quarter earnings above Wall Street expectations on both sales and profit, posts gross margins of 47.9% and says it holds $136.94 billion in cash.

In our earlier article on the S&P 500’s slide despite a rebound in tech and AI-linked names, we noted that earnings-driven sector rotation was colliding with broader selling pressure as the index stayed below key moving averages. Traders Union experts highlighted mixed momentum and elevated uncertainty, with attention centered on whether SPX could reclaim nearby resistance or break down through support to define the next move.

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