Market Watch: Stocks rebound as oil prices drop

Investors regained ground Monday after U.S. stocks suffered their worst single-day loss since June on Friday. The rebound was fueled by a sharp decline in oil prices and renewed hopes for diplomatic progress between the United States and Iran. Futures for the S&P 500 rose 0.5%, while Dow Jones Industrial Average futures climbed 0.6%. Nasdaq futures increased 0.8%.

Brent crude, the international benchmark, fell 4.2% to $108.68 per barrel. U.S. benchmark crude also dropped 4.2% to $99.74 per barrel. Although these figures remain well above the $65 and $61 per barrel levels seen at this time last year, the recent drop has eased immediate pressure on market valuations.

The dip in energy costs follows comments from Iran’s top diplomat, who shared an interview on his Telegram channel over the weekend. He stated that Iranian negotiators were in Qatar discussing a proposal to reopen the Strait of Hormuz within two days if the U.S. met specific conditions. He clarified that no direct talks were being held with American officials, noting that the outcome depends on U.S. answers to Iranian questions.

Technology stocks continue to face scrutiny over high capital expenditures. Apple and Palantir Technologies report earnings after the bell on Monday, while Advanced Micro Devices releases results on Tuesday. These reports follow last week’s market jolt from earnings released by Alphabet and Amazon, which raised questions about the return on massive artificial intelligence spending.

Mergers and acquisitions activity persists despite recent volatility in the sector. Marvell Technology agreed to an all-stock deal to acquire Lumentum for approximately $115 billion, including debt. Marvell stated that the investment environment remains active, a position that contrasts with broader market hesitation. Before the opening bell, Marvell shares slid more than 1%, and Lumentum fell almost 3%.

Global markets showed modest gains alongside the U.S. rebound. Britain’s FTSE 100 rose 0.1% to 10,736.14. Germany’s DAX climbed 0.1% to 25,847.97, and France’s CAC 40 added 0.2% to 7,988.21. Asian markets were mostly higher. The U.S. dollar strengthened to 157.91 Japanese yen, up from 157.49, while the euro traded at $1.1211, rising from $1.1160.

Traders are also watching for Tuesday’s U.S. midterm elections and Friday’s October jobs report. In September, U.S. employers added 29,000 jobs, and the unemployment rate rose to 4.2%. Voters have expressed growing concern over AI, data centers, and inflation, factors that may influence the political landscape heading into the elections.