Tech Stocks Slide as AI Selling Overwhelms Oil's Plunge

The month opened with expectations of a recovery following a tough October, but by afternoon technology stocks had come under renewed selling pressure. Hopes of diplomatic progress between the US and Iran pushed crude oil significantly lower, yet that favourable factor for inflation and business expenses failed to keep the earlier equity advance intact.

The key theme is divergence. The Dow Jones Industrial Average maintained gains, whereas the S&P 500 and Nasdaq composite declined. Bond yields mostly moved lower, precious metals recovered, and Bitcoin moved in tandem with the struggling tech sector. The drop in oil provided some comfort to buyers, yet the AI trade continued to face a lack of confidence.

Dollar mixed, Swiss franc leads

In the afternoon snapshot provided, the US dollar was mixed, recording its biggest drop versus the Swiss franc and its largest rise against the Australian dollar.

EURUSD climbed 0.33% to 1.1195, and GBPUSD advanced 0.13% to 1.3409. USDCHF fell 0.87% to 0.8178, underlining the franc's outperformance. USDJPY edged up 0.22% to 157.88, while USDCAD gained 0.09% to 1.3986.

AUDUSD dropped 0.46% to 0.6998, and NZDUSD declined 0.18% to 0.5618, a pattern that matches a more risk-averse mood as the stock recovery dissipated.

Treasury yields broadly decline

Yields on longer-term government bonds decreased, while the two-year note was nearly flat. The following afternoon levels were recorded:

• The 2-year yield was 4.5833%, an increase of 0.23 basis points.
• The 5-year yield fell 2.89 basis points to 4.6931%.
• The 10-year yield declined 3.30 basis points to 4.8960%.
• The 30-year yield dropped 3.39 basis points to 5.2751%.

The steep decline in oil prices provided some reprieve from future inflation concerns, and softer construction spending combined with renewed stock selling gave further impetus to bond demand. Still, manufacturing surveys continued to signal troubling price pressures. The economic data did not offer the Federal Reserve a straightforward case for policy loosening.

Dow climbs while tech stocks retreat

The following afternoon index changes were reported:

• The Dow Jones Industrial Average rose 0.52%.
• The S&P 500 fell 0.41%.
• The Nasdaq Composite declined 0.96%.
• The Nasdaq 100 dropped 1.29%.

The heavier loss in the Nasdaq 100 highlighted the strain on large-cap growth stocks. Typically, falling yields would offer backing for such shares, but on this occasion that support was overtaken by fresh selling pressure.

Under the surface, individual stock movements were far more pronounced. Marvell slid 12.81%, Astera Labs dropped 11.39%, Intel lost another 8.70%, and AMD declined 7.03%. The softness spread beyond semiconductors: CoreWeave fell 9.01%, Nebius declined 8.20%, Western Digital dropped 7.85%, and Datadog was down 7.81%.

The shared thread is involvement in AI infrastructure, computing, storage, and cloud expenditures. Intel's ongoing fall compounded the pain after last week's post-earnings rout. The overall indexes capture only a fraction of the picture; the revaluation beneath remains far sharper.

ISM manufacturing strengthens, inflation still elevated

The ISM manufacturing survey showed its most robust expansion reading. The October headline index climbed to 55.5 from 54.5, surpassing the 54.5 consensus figure. Output advanced to 59.0 from 56.7, and new orders inched up to 55.5 from 55.3. Employment eased to 52.4 from 52.7 but stayed above the 50 growth threshold.

The prices paid subindex declined to 75.2 from 77.9, weaker than the 77.5 forecast. While marginally positive, it continued to indicate broad-based increases in input costs. Supplier delivery times lengthened a bit more. The sector is growing, but the expansion is accompanied by supply bottlenecks and high costs, maintaining the Fed's cautious posture.

S&P Global PMI points to slower growth, higher costs

The final S&P Global manufacturing PMI offered a more subdued growth picture. The gauge was adjusted lower to 54.9 from the initial 56.0 and trailed September's 55.9. It still stood well above 50, but the pace of new-order expansion slowed to its most sluggish since March.

Employment growth hit its fastest rate since April 2021, and selling prices rose at their quickest clip since September 2022. Delivery times also extended substantially. For businesses, the signal is mixed: output keeps rising, but rising costs and shipping holdups squeeze margins.

Construction spending weakest area

Outlays on construction declined 1.9% in September, versus forecasts of a 0.3% gain. August's reading was revised up to +2.0% from +0.9%, softening the month-on-month contrast, yet the fundamental softness was still apparent.

Private residential investment fell 5.5%, more than offsetting a 1.1% rise in private nonresidential construction. Overall expenditure was 2.7% lower than a year ago and 2.9% below for the first nine months of 2026.

Collectively, the US data paint a picture of an unbalanced economy. Factory activity keeps expanding, but housing construction is softening and inflation pressures stay high. This mix provides no straightforward growth narrative for equities nor an unambiguous easing signal for the central bank.

Canada's manufacturing data were even softer. The PMI dropped to 49.6 from 51.5, falling into contraction territory as production, orders, and employment all shrunk. Higher input costs and selling prices introduced a troubling inflation component to the deceleration.

Oil plunges on diplomatic hopes

West Texas Intermediate crude was at $96.12, a decline of $8.00, or 7.68%, in the provided snapshot.

Hopes that talks could yield a framework to restart shipping through the Strait of Hormuz were cited as a factor. However, the reported Iranian offer remained conditional, and the US administration had yet to accept it. Investors are pricing in greater optimism for progress, though a final deal has not been reached.

Cheaper oil has the potential to relieve consumers, transport expenses, and inflation. The inability of technology stocks to sustain their recovery despite that boost illustrates the tenacity of the selling pressure.

Gold and silver rally; Bitcoin falls

Spot gold was trading near $3,942.77, gaining roughly $67, or 1.73%. Silver advanced 2.77% to $50.47.

Gold's rise aligns with falling Treasury yields, which lower the opportunity cost of owning a non-yielding asset. The dollar's uneven showing also removes a consistent currency drag on gold. Silver joined the precious metals recovery even as equities remained cautious.

Bitcoin moved in the opposite direction, dropping 1.84% to $76,795. In this session, it acted more like the beleaguered technology sector than the rebounding precious metals market.

The coming challenge is whether falling oil and yields will eventually enable buyers to steady equities, or if AI-related selling remains in control. With Apple and Palantir reporting after the bell, and the US midterm elections on Tuesday, traders remain attentive to corporate outlooks and political ambiguity.