Stocks bounce back after tech shakeup as oil prices drop

U.S. stock futures climbed on Monday, recovering from a steep sell-off that marked the worst trading day for major indices since June. The rebound was fueled by a sharp decline in oil prices and renewed optimism regarding diplomatic talks between Washington and Tehran. Investors who had previously offloaded positions in artificial intelligence and technology sectors began to buy back in as the market steadied.

The S&P 500 futures advanced 0.5%, while the Dow Jones Industrial Average futures rose 0.6%. The Nasdaq futures index gained 0.8% in premarket trading. This movement reversed the panic seen on Friday, when concerns over the rapid pace of AI spending prompted a broad retreat from growth stocks. The market is now watching for signals that the heavy investments in AI infrastructure will yield returns soon enough to justify the cost.

Corporate earnings are a central focus this week. Apple and Palantir Technologies are scheduled to report results after the market close on Monday. Advanced Micro Devices is expected to release its quarterly figures on Tuesday. These reports follow last week’s announcements from Alphabet and Amazon, which unsettled traders by highlighting the scale of their AI-related expenditures.

In the energy sector, Brent crude, the international benchmark, fell 4.2% to $108.68 per barrel. U.S. benchmark crude dropped 4.2% to $99.74 a barrel. While these levels remain well above the roughly $65 price point seen a year ago, the recent drop has eased pressure on fuel-dependent industries. The price decline comes as Iran’s top diplomat indicated that negotiators are in Qatar discussing a proposal to reopen the Strait of Hormuz within two days, provided the U.S. meets specific conditions.

Corporate dealmaking continues despite the market volatility. Marvell Technology and Lumentum announced an all-stock merger valued at approximately $115 billion, including debt. Marvell executives stated they believe the investment remains warranted even after last week’s AI stock pullback. However, traders were less certain, with Marvell shares sliding more than 1% before the opening bell and Lumentum falling nearly 3%.

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

Voters and investors are also turning their attention to Tuesday’s U.S. midterm elections. Political candidates across the spectrum have raised concerns about AI, data centers, and inflation. The market will also await the October jobs report on Friday. In September, U.S. employers added 29,000 jobs, and the unemployment rate rose to 4.2%, a figure that remained historically low despite the slower hiring pace.