Nov 2 (Reuters) - The S&P 500 ended lower on Monday as oil prices tumbled on optimism about a potential US-Iran peace agreement, while Apple shares dipped ahead of the iPhone maker's quarterly report and investors awaited Tuesday's US midterm elections.
Longer-dated US Treasury yields moved lower and Brent crude prices fell as Iran indicated it was open to peace talks after eight months of war in the Middle East that have kept energy prices elevated and stoked inflation.
Apple (AAPL.O), closed down by 1.5% ahead of its quarterly report. After the closing bell, Apple posted results that beat expectations, driven by early demand for its iPhone 18 Pro lineup and price increases that helped offset rising memory-chip costs. The shares were close to flat after the report.
Amazon (AMZN.O), rallied 2.2%, while Tesla (TSLA.O), climbed 1%.
The Dow finished higher on Monday, and early in the session, the S&P 500 and Nasdaq gained on the first day of trading in November.
In October, the Nasdaq fell 5.3% for the month following a selloff on Friday related to worries that massive spending on AI infrastructure is outpacing near-term cash generation.
Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma, warned that investors remain concerned about the pace of AI spending.
"Companies have to realize there's a limit to how much they spend and what it means in terms of enhanced shareholder value. At some point, there is no additional value-add, just expense," Dollarhide said.
The S&P 500 declined 0.51% to end the session at 7,541.40 points.
The Nasdaq dropped 1.07% to 25,164.32 points, while the Dow Jones Industrial Average rose 0.41% to 51,983.98 points.
Seven of the 11 S&P 500 sector indexes rose, led by consumer discretionary (.SPLRCD), up 2.25%, followed by a 1.83% gain in materials (.SPLRCM). The energy index (.SPNY), fell 4%.
Volume on US exchanges was relatively heavy, with 18.8 billion shares traded, compared to an average of 17.3 billion shares over the previous 20 sessions.
Oracle (ORCL.N), dropped almost 9% after regulatory filings showed the cloud infrastructure provider plans to raise $20 billion through a debt and share sale, highlighting investor concerns that debt-funded spending could become harder to justify as borrowing costs rise.
Sentiment toward AI-related companies remained shaky after an amended IPO filing showed Anthropic's net loss narrowed sharply in the third quarter, while revenue jumped ahead of a potential listing.
Marvell Technology (MRVL.O), tumbled 13% after the chipmaker said it was buying optical components maker Lumentum (LITE.O), opens new tab in a $115 billion all-stock deal, including debt. Lumentum dropped 18.6%.
Intel (INTC.O), fell 8.8%, adding to a 29% drop on Friday after it forecast quarterly revenue below market estimates and said it did not expect positive cash flow this year.
Palantir (PLTR.O), dipped 3.1% ahead of its quarterly report after the bell.
Chipmaker AMD (AMD.O), fell 7.5% ahead of its quarterly report on Tuesday.
S&P 500 third-quarter earnings are on track to climb over 30% year-over-year, with AI heavyweights accounting for much of that jump, according to LSEG data.
Following Wall Street's recent decline, the S&P 500 is valued at about 19 times expected earnings, its lowest valuation since 2023.
Investors were also focused on US midterm elections on Tuesday, which will determine whether Democrats can wrest control of Congress away from President Donald Trump's Republican Party.
Polls suggest Democrats are likely to win the House of Representatives. The outcome in the Senate is less clear. Republicans controlled both chambers of Congress during the first two years of Trump's latest term.
Meanwhile, data showed that US manufacturing activity picked up in October amid solid domestic demand.
Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX), by a 2.2-to-one ratio.
The S&P 500 posted 35 new highs and one new low; the Nasdaq recorded 112 new highs and 323 new lows.
Reporting by Shashwat Chauhan and Utkarsh Hathi in Bengaluru, and by Noel Randewich in San Francisco; Editing by Maju Samuel and David Gregorio
