Oil Plunges and Tech Slides on the Eve of the Midterms: What Monday’s Split Market Means for Massachusetts

Wall Street closed out the last trading day before the midterm elections with two very different stories running at once. Oil prices fell sharply on hopes of a diplomatic opening with Iran, which helped most stocks in the S&P 500 rise. But another round of selling in artificial-intelligence and chip stocks dragged the tech-heavy indexes lower, leaving the broad market in the red.

The S&P 500 fell 0.5% on Monday, Nov. 2, after giving up an early gain of 1.1%, according to The Associated Press. The Dow Jones Industrial Average rose 213 points, or 0.4%, and the Nasdaq composite dropped 1.1%. Yahoo Finance put the Dow’s close at 51,983.98, making it the only major U.S. index to finish higher.

For Massachusetts, where voters are casting ballots today and where many households heat with oil and many retirement accounts lean on large technology stocks, both halves of Monday’s session matter.

What is confirmed

• Oil: Brent crude, the international benchmark, fell 7.6% to $104.77 a barrel, the AP reported. Yahoo Finance reported U.S. crude down about 7.5% to near $96. The AP noted Brent’s most active contract has swung between roughly $70 and $120 since just before the war with Iran began.
• Why oil fell: Yahoo Finance cited reports that Washington and Tehran are seeking a diplomatic resolution, including an Axios report that President Trump wants to give diplomacy another chance.
• Tech: Chipmakers led a renewed slide. Yahoo Finance reported the technology sector fund XLK down 2.4% in afternoon trading and said the Nasdaq 100 had already closed Friday about 9% below its Oct. 6 record.
• Individual names: Oracle fell about 5% after announcing a $20 billion capital raise split between bonds and stock. Apple slipped nearly 2% ahead of its after-the-bell earnings report. Palantir reported third-quarter revenue of $2.313 billion, up 96%, and raised its full-year outlook.
• Breadth: Despite the index losses, most S&P 500 stocks rose, according to the AP.

What is driving the AI selloff

The AP’s Stan Choe described the core worry plainly: investors are questioning whether the hundreds of billions of dollars that Big Tech is pouring into AI data centers will produce enough productivity and profit to justify the spending. Critics have argued for months that the sector rose too far, too fast.

Oracle’s capital raise fed that concern on Monday. Borrowing and issuing stock to fund AI infrastructure suggests the bills are arriving before the revenue does, and the market responded accordingly. Palantir’s strong results showed that some companies are turning AI demand into sales, but one beat was not enough to change the mood across the chip sector. Yahoo Finance also noted a Bank of America warning that a lasting AI selloff would be a major risk to the broader economy.

The Fed and the calendar

Interest rates remain the other big variable. The Federal Reserve held its benchmark rate in a 3.75% to 4% range on Oct. 28 in a 10-2 vote, with two officials favoring a hike. Yahoo Finance said markets were pricing roughly 76% odds of a rate increase in December, and the 10-year Treasury yield sat near 4.89% early Monday. A manufacturing survey from the Institute for Supply Management came in at 55.5, a sign of expansion, and the October jobs report is due Friday.

Then there is today’s election. Analysts quoted by Yahoo Finance expect Democrats to win at least one chamber of Congress, and they flagged pharmaceuticals, housing and AI data centers as policy areas to watch regardless of the outcome. Those happen to be three sectors with a large footprint in Greater Boston.

The Boston Made Take

Boston Made sees Monday as a useful snapshot of the two forces that have defined this fall’s markets: energy prices tied to a war, and a reckoning over how much the AI build-out is worth. For Massachusetts, the first is a household-budget issue and the second is a retirement-account and jobs issue.

Cheaper crude is good news heading into heating season, though one day’s drop does not set the price of a delivery of heating oil next month. Brent’s range since the war began shows how quickly the gains can reverse if diplomacy stalls. Any relief at the pump or the oil tank will depend on whether that diplomacy holds.

On tech, the selloff is a reminder that index funds are more concentrated than many savers realize. When a handful of the largest companies falls, a broad fund can lose ground even on a day when most stocks rise, as happened Monday. Massachusetts also has a sizable stake in the outcome through its life sciences and software employers, which compete for the same capital that AI spending is absorbing.

Boston Made does not read Monday’s session as a verdict on the election. Markets rarely move on results in a straight line, and the Fed’s December decision and Friday’s jobs data may matter more to portfolios than who controls Congress.

What it means for you

• Heating oil customers: Lower crude may ease prices, but lock-in contracts and delivery prices lag the futures market. Compare quotes before committing.
• 401(k) holders: Check how much of your index fund sits in a few large tech names; a day like Monday shows that concentration cuts both ways.
• Borrowers: With markets leaning toward a December hike, variable-rate debt such as credit cards and home equity lines could get more expensive.
• Voters: Polls in Massachusetts close at 8 p.m. today. Market swings are not a reason to change a long-term plan.

Discussion

1. Is the AI spending boom a bubble, or is the market simply impatient for returns?
2. Should Massachusetts do more to shield households from swings in heating oil prices?
3. Which matters more for your finances this winter: the election results, the Fed, or oil?