U.S. stocks recover on Iran diplomacy hopes and oil retreat despite mixed data

The latest U.S. data releases left market participants with reasons to lean both ways. Factory activity is still growing, yet a steep drop in construction outlays and persistent price pressures darkened the wider picture. The figures offered some support to manufacturers but a weaker case for equities.

The more supportive force is coming from the Middle East, where fresh optimism about U.S.–Iran diplomacy and a sharp fall in oil prices are letting buyers reclaim some ground after a rough October.

Factory gauge climbs, but cost pressures persist

The strongest signal came from the ISM manufacturing report. Its main index improved to 55.5 from 54.5, topping expectations in the 54.6–54.7 range. Output rose to 59.0 from 56.7, while new orders ticked up to 55.5 from 55.3. Hiring slipped to 52.4 from 52.7, yet still held above the 50 mark that separates expansion from contraction. So factories remain in growth territory, even if the pace of hiring cooled a little.

On the inflation front, the ISM prices-paid index came in at 75.2, down from 77.9. That offers some encouragement around the edges, but the level still signals broad increases in input prices. Supplier deliveries slowed further as well. The report backs the growth camp, yet gives the Federal Reserve little reason to claim inflation has been tamed.

S&P Global's survey points to cooler expansion and margin strain

The S&P Global report made that brighter view harder to hold. Its final October manufacturing PMI came in at 54.9, down from 55.9 in September and below the 56.0 that had been expected. The reading still indicates healthy expansion, just at a more moderate clip.

The survey showed hiring at its strongest level since April 2021, while input-cost inflation accelerated and delivery times got longer. Stronger activity is good news for businesses. But higher costs and supply delays make it harder for margins to hold up.

Construction outlays tumble as housing activity softens

The obvious weak point in the data was construction. Outlays in September dropped 1.9% from the prior month and were 2.7% lower than a year earlier. Private construction fell 2.4%, with a steep 5.5% decline in residential spending leading the way.

Those numbers underscore housing's softness and leave the expansion picture uneven. Manufacturing is growing while construction heads the other way.

Iran talk and cheaper oil brighten the stock backdrop

Renewed hopes that Washington and Tehran might reach a diplomatic arrangement have given equities a friendlier backdrop. Mediation has kept alive the chance that the Strait of Hormuz could reopen and supply disruptions could ease. Crude prices dropped sharply as investors pared back some of the geopolitical risk premium, though no deal has been confirmed.

For stocks, the possible payoff goes beyond cheaper gasoline. If oil keeps falling, transportation and production expenses would ease, household budgets would get some relief, and corporate margins could benefit. Less energy-related inflation might also give the Federal Reserve more room to maneuver.

Airlines, transport companies and consumer-facing businesses stand to gain, and if bond yields drop as well, technology valuations would get an extra lift.

Nasdaq paces the rebound as November trading begins

The new week and month are opening with buyers back in control. In the most recent quotes, the S&P 500 had climbed 73.99 points, or 0.98%, to 7,654.06. The Nasdaq Composite added 332.28 points, or 1.31%, to 25,769.28, while the Nasdaq 100 climbed 320.85 points, or 1.13%, to 28,705.70.

The Russell 2000's 1.16% gain suggests participation is not confined to the biggest tech names.

The bounce is a good sign, but Friday's selloff left technical damage that needs repairing. Buyers hold the early edge. Finishing the session with those gains intact—and pushing through the next resistance levels—would lend the rally more credibility.

S&P 500: The 100-day line is back in buyers' hands

The index's push back over the 100-day moving average at 7,618.85 marks a meaningful first step. That area now serves as a key reference point for both sides.

Holding above it keeps buyers in charge, with the 100-hour moving average near 7,701 and the 200-hour moving average at 7,720.68 representing the next upside objectives. A drop back under 7,618.85 would sap the recovery and restore the advantage to sellers.

Nasdaq Composite: The next test is September's swing low

Friday's tumble left the Nasdaq Composite shy of its 200-day moving average. The index's bounce today has carried it to 25,799.46, just under September's swing low at 25,831.74.

Holding above that level after crossing it would boost confidence that the advance has room to run. The next major hurdle remains the 100-day moving average near 26,258, so the job would not be finished. Until those levels are retaken, this looks like a rebound inside a weaker technical setup.

Nasdaq 100: A swing zone blocks the path to more upside

The Nasdaq 100 likewise failed to reach its rising 200-day moving average in Friday's slide, with that average now around 26,942. Support instead emerged near the 38.2% retracement of the rally off the late-March low at 28,108.

A gap higher today has moved the index nearer to a key swing zone spanning 28,822 to 28,953, though the high of the session around 28,753 is still beneath it. To reinforce the bullish tilt, buyers need to clear that zone and stay above it. After that, the 100-day moving average near 29,554 is the next significant upside objective.

Intel stays weak after Friday's plunge; Apple, due after the close, sits between its hourly averages

Intel has not shared in the broader market's strength, with its stock still feeling the effect of Thursday's post-close earnings disappointment. The shares lost more than 25% on Friday and were lately down about 3% on the day at $63.76, the lowest price since mid-April.

Apple was also trading lower, with the price testing the 200-hour moving average at $340.25. The 100-hour moving average is at $344.64. Apple's report is due after today's close, with EPS estimated at $1.99 versus $1.85 a year earlier and revenue at $113.4 billion versus $102.47 billion a year earlier.

There is a window for buyers. Can they make the most of it?

The fundamentals offered one interpretation; the price action and the technical tools applied to it present traders with the whole picture.