US Stock Trends (November 3): Oil Prices Plunge 7%, Apple Reports Record Revenue But Stock Falls After Hours

Written by: Chaoxiang Research

US-Iran diplomatic breakthrough signals trigger a ~7% oil price plunge, marking the largest single-day drop in three months, driving gains in the Dow Jones and mid/small-cap stocks, while tech stocks remain under pressure, pushing the Nasdaq down another 1%. Marvell announced an all-stock acquisition of Lumentum, causing both stocks to plummet, and selling pressure along the AI infrastructure chain continues. After hours, Apple reported record quarterly revenue of $114.5 billion, beating expectations, yet its stock still fell ~4%; Palantir's revenue growth of 63% also beat expectations, with its stock rising initially before falling back. Today is the US midterm election voting day, and AMD will release earnings tonight.

Dow Jones Rises, Nasdaq Falls, Funds Accelerate Flow into Old Economy

On Monday, the Dow Jones gained 0.41%, closing at 51,983.98 points; the S&P 500 fell 0.51%, closing at 7,541.40 points; the Nasdaq dropped 1.07%, closing at 25,164.32 points. The divergence between the Dow and Nasdaq widened to 1.5 percentage points, reflecting funds shifting from high-valuation tech stocks to traditional industries with stronger cash flow certainty.

The equal-weighted S&P 500 ETF (RSP) rose 0.76%, outperforming the market-cap weighted index by over a percentage point for the fourth consecutive week. The VIX jumped 8.91%, reclaiming the 20 level to close at 21.15, with volatility continuing to climb despite the Dow's gain.

By sector, the sharp oil drop benefited consumer and industrial sectors, with discretionary consumer leading gains. The energy sector fell sharply, dragged down by oil prices. Information technology led losses again, dipping nearly 3%, facing continued selling across multiple trading days.

Among the Magnificent Seven, Nvidia flipped from morning gains to close in the red, weighing on the late-session weakness of the S&P 500. Microsoft fell 0.50%, Apple dipped 0.89% (with separate after-hours movement due to earnings). Tesla extended its recent momentum, surging 7.41%.

The S&P 500 closed at a low of 7,541.40 points, its lowest since July 31, retreating 3.55% from the October 6 all-time high of 7,818.93.

Marvell Acquires Lumentum, AI Infrastructure Chain Selling Continues

Marvell announced an all-stock acquisition of optical communications leader Lumentum, with each Lumentum share exchangeable for 4.5 Marvell shares. Based on Marvell's Friday closing price, the deal value amounted to approximately $883 per Lumentum share, but following the announcement, both stocks plummeted, and by Monday's close, the actual implied valuation had dropped to roughly $771 per share.

Marvell closed down 12.72% at $171.41, while Lumentum fell 18.59% to $684.40. Nvidia previously invested $2 billion each in both companies, and Lumentum's CEO had earlier stated that optical network production capacity was sold out through early 2029.

The deal is expected to close in the first half of 2028, granting Marvell end-to-end capabilities ranging from custom chips to optical modules. However, the market's reaction was straightforward: amid already anxiety-inducing AI capital expenditure, a near-$100 billion acquisition only burdens the bill rather than solving problems.

The Philadelphia Semiconductor Index continues to slide, accumulating a decline nearing 10% across two trading days including last Friday's crash.

Apple Revenue Hits Record But Dips 4% After Hours, Palantir Rises Then Falls

Apple reported Q4 FY2026 results (ending Sept 26) after hours. Revenue reached $114.5 billion, up 12% year-over-year, setting a September quarter record; EPS was $2.10, up 14% YoY, with tariff refunds contributing ~$0.05. Both beat market expectations.

iPhone revenue hit $57.58 billion, a record for the period, boosted by the first-week sales of the iPhone 18 Pro series (released Sept 18, counting nine days of sales). Services revenue reached $31.57 billion, a new high. Mac revenue was $10.79 billion. Full-year total revenue hit $479 billion, marking Apple's best fiscal year ever.

Gross margin stood at 47.9%, with about one percentage point stemming from tariff refunds; excluding this, it fell below the prior quarter's 50.1%. Rising memory chip costs and supply chain constraints continue to erode margins.

Despite numbers beating estimates across the board, Apple's stock still fell ~3.8% after hours. Market concerns center on three areas: revenue beat was modest (~$1B above consensus), iPhone Duo faces severe supply bottlenecks, and the company provided no specific guidance for next quarter. This is the first earnings report since new CEO John Ternus took over.

Palantir also released Q3 results after hours. Revenue came in at $1.18 billion, up 63% YoY and beating expectations; adjusted EPS was $0.21, surpassing the $0.17 estimate. US commercial revenue grew 121%, and US government revenue increased 52%. Contract backlog totaled $2.76 billion, up 151% YoY. The company raised its full-year guidance. However, the stock initially rose 3% in after-hours trading before retreating, ultimately falling ~3.6%. Notable investor Michael Burry previously disclosed holding put options on Palantir, intensifying selling pressure.

Oil Price Plunges 7%, US-Iran Diplomatic Signals Spark Largest Drop in Three Months

WTI crude plummeted ~7.3% to close around $96.5/barrel; Brent crude fell ~7.8% to settle near $104.6/barrel, both marking the largest single-day drops in three months.

The direct catalyst was positive diplomatic signals between the US and Iran. With negotiations in Doha entering their third day, Tehran proposed a plan to reopen the Strait of Hormuz within two days. The market interpreted this as a sign that war risk premiums could quickly fade, causing crude to retreat rapidly from its near-seven-week high last Friday.

The sharp oil drop triggered chain reactions. Inflation expectations cooled, dragging long-end US Treasury yields lower—the 10-year yield fell ~3.5 bps to 4.893%, the 30-year dropped ~4 bps to 5.268%. The 2-year yield remained flat at 4.581%.

Gold rebounded from its one-year low last Friday, with December gold futures rising ~1.5% to $3,957/oz. Falling oil eased inflation worries, while declining yields reduced the opportunity cost of holding gold. Silver surged 4.2%.

Bitcoin remains under pressure from the shadow of the Binance hack incident, closing around $76,700, down ~1.3%. Ethereum hovered near $2,200. The ISM Manufacturing PMI came in at 55.5, beating expectations and staying in expansion territory for a third straight month, while the prices paid index remains elevated. The US Dollar Index closed around 101.9, essentially flat.

Today's Watch

All times are in Beijing Time.

Today: US Midterm Election Day. All 435 House seats and 35 Senate seats are up for simultaneous elections. The results will determine congressional control for the second half of Trump's term, directly impacting the trajectory of tax policy, fiscal spending, AI regulation, and crypto policy. Historical data shows a 95% probability of the S&P 500 rising within 12 months post-midterms (dating back to 1938). Election results may roll in throughout Wednesday morning Beijing Time, but vote counting for key swing seats could take several days.

After Hours Tonight: AMD Q3 Earnings Release. Consensus expects revenue of ~$13.1 billion, up 42% YoY; EPS of ~$1.94, up 62% YoY. Following Intel's sharp drop last week, AMD's performance in data center GPUs and AI chips will serve as a key pillar for semiconductor sector confidence.

Other Earnings This Week: Qualcomm (Wed after hours), Arm (Wed after hours), Arista Networks (Thurs after hours). More data points along the AI infrastructure chain are set to emerge.

Friday 21:30: US October Non-Farm Payrolls Report. September saw only 29k jobs added, with the labor market continuing to cool. This data will directly influence market pricing for a potential 25-basis-point Fed rate hike in December.