US stocks opened higher on Tuesday as falling oil prices and a rebound in chip stocks helped lift sentiment ahead of the midterm elections.
However, losses in Apple and Palantir weighed on the market, while investors continued to assess the outlook for major technology companies amid concerns about artificial intelligence spending.
The S&P 500 was up 0.19% while the Nasdaq Composite gained 0.56%. The Dow Jones Industrial Average fell 253 points.
The mixed performance came after a difficult session on Monday, when the Nasdaq Composite fell 1.07%, and the S&P 500 lost 0.51%.
The Dow, by contrast, gained around 214 points, or 0.41%.
Apple and Palantir fall despite gains in chip stocks
Apple shares dropped around 3.5% in trading after the company issued a weaker-than-expected outlook for its holiday-quarter gross margin.
The company warned that rising memory chip costs would continue to put pressure on profitability.
Its iPad sales also missed analysts’ estimates in the fiscal fourth quarter.
The decline added to pressure on the technology sector, where several major companies have struggled to satisfy investor expectations despite strong results and continued investment in AI.
Palantir Technologies also fell, losing around 4.2% in trading.
The AI-powered analytics software provider forecast fourth-quarter revenue above analysts’ expectations after reporting better-than-expected third-quarter results.
However, the broader technology sector showed signs of recovery.
Nvidia shares rose 3.3 after four consecutive sessions of losses, while AMD gained 4.6% ahead of its quarterly earnings report after the market close.
Marvell Technology and Intel advanced 0.3% and 3.19%, respectively.
Other chipmakers also moved higher, with Micron gaining nearly 4% and Broadcom rising around 3.5% in trading.
Oil prices decline as markets monitor US-Iran developments
Falling crude prices provided another source of support for equity futures.
Brent crude declined around 1.7% in early trading, extending losses from the previous session as investors monitored developments in negotiations between the US and Iran.
Brent was trading near $102 a barrel, while West Texas Intermediate futures fell nearly 1% to around $95.
The decline followed a sharp drop in oil prices during the previous session, driven by speculation that progress could be made towards a peace agreement between Washington and Tehran.
Meanwhile, US President Donald Trump said Washington would stop providing military aid to Israel after the end of this year.
Concerns about a possible resumption of US attacks on Iran after the midterm elections remain another potential source of uncertainty for markets.
Trump, however, said on Monday that he was not considering striking Iran after the elections.
Midterm elections add to market uncertainty
Investors are also assessing the potential impact of Tuesday’s US midterm elections, which will determine control of Congress for the remainder of Trump’s second term.
Polls and nonpartisan analysts have indicated that Democrats could win control of the House of Representatives, while the Senate race remains uncertain.
The election outcome could influence market sentiment, particularly for sectors such as artificial intelligence, healthcare and defence.
A change in congressional control could also affect investigations and regulatory oversight.
Technology stocks remain under pressure as investors question whether large AI infrastructure investments will generate sufficient returns.
The Nasdaq-100 closed more than 10% below its record closing high on Monday, confirming that the index had entered correction territory.
Concerns have also increased as technology companies turn to bond markets to finance their AI investments, raising questions about the sustainability of debt-funded spending.
Morgan Stanley analysts have suggested that the broader market correction may be nearing its final stages.
Meanwhile, investors are looking for greater clarity from the election outcome as they assess the next direction for US equities.
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