Dow slides as Apple earnings disappoint investors (4 Nov)
- The Dow Jones Industrial Average fell 0.52% to 51,713.14 on November 3.
- Apple shares dropped after the company issued a lower-than-expected margin forecast.
- Palantir stock declined despite reporting strong third-quarter earnings.
- Investors are closely watching the U.S. midterm elections for potential policy shifts.
- Brent crude oil prices rose to $106.71 as markets navigated economic uncertainty.
Other indices showed mixed results at the same time, with the S&P 500 rising 17.63 points to 7,559.03 and the Nasdaq Composite gaining 143.29 points to 25,307.65.
As of 1:33 a.m. EST on November 3, Dow futures dropped 0.47 percent, S&P 500 futures fell 0.25 percent, and Nasdaq-100 futures declined 0.20 percent. Yahoo Finance reported Dow futures were down 0.6 percent, S&P 500 futures fell 0.1 percent, and Nasdaq futures rose 0.4 percent shortly before the market opened. Coinpaper reported that Dow futures fell approximately 0.7 percent, S&P 500 futures declined about 0.2 percent, and Nasdaq-100 futures edged slightly higher.
Inkl.com reported the Dow fell while the S&P 500 and Nasdaq rose, with Apple, Nvidia, and AMD as focal points. Yahoo Finance data indicated Apple stock dropped 1.56 percent, the S&P 500 rose 0.31 percent, the Nasdaq Composite increased 0.79 percent, AMD climbed 4.84 percent, and the Dow fell 0.61 percent.
Falling oil prices helped cyclical shares hold the Dow up on Monday, while technology shares continued to fall, leaving the Nasdaq down more than 1 percent.
Apple shares fall on weaker margin outlook
AdmiralMarkets and other outlets reported that the earnings disappointed investors after the market close.
The company issued a gross margin forecast of 45% to 46%, below the 46.9% analysts expected. Investors expressed concerns regarding these margins and slower services growth.
Shares fell about 2.7% to 2.8% in after-hours trading on November 2. The stock dropped roughly 4.5% in pre-market trading on November 3. By 11:05 a.m. ET on November 3, the market-value loss reached about $107 billion.
Broader technology sector pressure persisted as semiconductor makers faced a sell-off that erased $1.64 trillion over six sessions. In contrast, Revity shares surged 11.15% after the company raised its annual earnings per share guidance to a range of $5.40 to $5.45. The Dow Jones Industrial Average, which weighs its 30 components by share price, remains sensitive to these individual stock movements.
Palantir stock declines despite strong earnings
The company also raised its revenue forecast.
Shares dropped 5% to 6.3% before the opening bell on November 3. By 12:01 p.m. ET, the company's market value was about $13 billion below the close on the previous Monday, widening a gap that sat at $6 billion at 11:02 a.m. ET.
The company reported that its U.S. commercial contract value grew 11% year over year. This performance prompted questions regarding the sustainability of its AI-driven revenue growth.
Midterm elections create political uncertainty
Investors prepared for the November 3 midterm elections as uncertainty weighed on market sentiment. The immediate focus remains on whether Democrats can gain control of Congress, with investors assessing the potential for tighter oversight of AI infrastructure. Opinion polls suggest the Democratic Party is expected to win control of the House of Representatives, while control of the Senate remains uncertain.
Democrats need a net gain of four Senate seats to take control. Election Day polls close at midnight UK time, with the earliest closing time for major U.S. states set for midnight GMT.
Societe Generale reported that concerns over fiscal deficits and government spending are impacting market volatility. The firm noted that a Democratic-controlled House could lead to legislative deadlock. Concerns regarding political uncertainty and AI spending weighed on global equities.
Dow futures fell about 0.7% as investors awaited election results and AMD earnings.
Oil prices and economic indicators weigh on markets
AdmiralMarkets reported that rising oil prices contributed to the decline in Dow futures on Tuesday. Brent crude oil rose 1.85% to $106.71 early Tuesday. This followed an 8% slump on Monday. On October 23, Brent crude reached $116 before dropping back below $107.
West Texas Intermediate crude for December delivery fell 0.49% to $95.99 per barrel. Petrol prices increased 9.1% during September alone.
Real GDP grew at an annual rate of 3.4% in the third quarter of 2026. Economists expect the October jobs report to show 65,000 new positions. This follows a gain of 29,000 jobs in September. The unemployment rate should reach 4.2%. Early Tuesday, the December mini Dow contract sat at 51,870, down 263 points.
Federal Reserve policy and interest rate concerns
Investors question if Big Tech infrastructure spending will provide sufficient returns while borrowing costs remain high. Lisa Cook and Beth Hammack favored a 0.25 point increase during that vote.
Chair Kevin Warsh said on October 28, "It's our responsibility to get inflation down". The CME FedWatch tool indicates an 82.6% probability of a rate hike in December.
Analyst sentiment and future market outlook
JP Morgan Asset Management analysis shows the S&P 500 rose in the 12 months following every midterm election since 1950. Aliasgar Tambawala of Klay Group warned that a split Congress may disrupt debt ceiling and government funding negotiations.
The blended earnings growth rate for the third quarter is 30.2% with 60% of companies reporting. Analysts noted that Advanced Micro Devices earnings could test investor confidence in artificial intelligence stocks. Advanced Micro Devices reports results after the closing bell on Tuesday. Investors look for evidence that semiconductor demand remains resilient.
President Donald Trump told Fox News that aid to Israel will end after this year.
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- US Awaits Midterm Election Results; Wall Street Opens Mixed (news.sbs.co.kr)
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