[BRIEFING.COM] The stock market finished Monday's session on a mixed note, with a sharp afternoon selloff in technology stocks erasing an early rally in the major averages despite continued strength across much of the broader market. The S&P 500 (-0.5%) and Nasdaq Composite (-1.1%) ended firmly lower after surrendering gains of more than 1.0% earlier in the session, while the DJIA (+0.4%) managed to hold on to a modest advance.

The session began on a much more encouraging note as a sharp decline in crude oil prices provided relief from the inflationary concerns and economic headwinds associated with elevated energy costs. WTI crude settled $7.55 lower (-7.3%) at $96.51 per barrel amid reports that the U.S. favors pursuing a diplomatic resolution with Iran rather than military action following the midterm elections. The development helped fuel early buying interest across a wide range of cyclical and consumer-facing stocks, although the energy sector (-4.0%) suffered substantial losses as oil prices retreated.

The broader market retained much of that early strength even as the major averages deteriorated throughout the afternoon. Seven S&P 500 sectors finished higher, with the consumer discretionary sector (+2.3%) leading the advance. Amazon (AMZN 245.63, +5.28, +2.20%) was a notable standout after Phillip Securities upgraded the stock to Buy from Accumulate with a $330 price target, while Marriott (MAR 416.30, +17.00, +4.26%)benefited from better-than-expected Q3 earnings and an improved outlook supported by resilient travel demand.

The financials (+1.8%), materials (+1.8%), consumer staples (+1.8%), and industrials (+1.4%) sectors also posted solid gains, reflecting continued investor interest in areas outside the technology trade. Homebuilders and other interest-rate-sensitive stocks benefited from a decline in Treasury yields alongside falling oil prices. Sherwin-Williams (SHW 352.37, +19.76, +5.94%) and Home Depot (HD 341.15, +11.95, +3.63%) were among the DJIA standouts.

The divergence between the broader market and the major averages was particularly evident in the performance of the S&P 500 Equal Weighted Index (+0.8%), which outperformed the market-cap-weighted S&P 500 by 1.3 percentage points. The S&P Mid Cap 400 (+0.8%) also finished higher, although the Russell 2000 (-0.2%) surrendered its earlier gains as selling pressure intensified during the afternoon.

The continued outperformance of the equal-weighted index underscored the market's ongoing rotation away from concentrated mega-cap leadership. Meanwhile, the information technology sector (-2.7%) was a major source of pressure, with the PHLX Semiconductor Index (-3.4%) suffering another substantial decline after briefly climbing nearly 2.0% earlier in the session. The reversal highlighted the persistent caution surrounding AI-related stocks following last week's sharp selloff, as investors continued to scrutinize elevated growth expectations and the substantial capital commitments associated with AI infrastructure development.

Advanced Micro Devices (AMD 466.84, -37.96, -7.52%) remained under pressure following Intel's (INTC 59.97, -5.79, -8.80%) disappointing earnings report last week, with AMD scheduled to report its own quarterly results after Tuesday's close. Tower Semi (TSEM 155.32, -11.16, -6.70%)) also declined despite reporting strong Q3 revenue growth and issuing above-consensus Q4 revenue guidance, reflecting continued skepticism toward AI infrastructure companies even when their underlying results remain encouraging.

Marvell (MRVL 171.41, -24.99, -12.72%) and Lumentum (LITE 684.40, -156.30, -18.59%) were additional semiconductor-related laggards following the announcement of their approximately $115 billion all-stock merger. While the combination would expand Marvell's AI connectivity and optical networking capabilities, concerns about substantial share issuance and integration risks weighed on both stocks.

Elsewhere in the technology sector, Oracle (ORCL 119.10, -11.57, -8.85%) faced significant selling pressure after disclosing plans to raise $20 billion through a combination of debt and equity financing, adding to concerns about the financing requirements of the AI infrastructure buildout. Apple (AAPL 338.32, -6.31, -1.83%) also traded lower ahead of its fiscal Q4 earnings report after the close, with investors awaiting updates on iPhone demand, rising memory costs, and expectations for the holiday quarter.

The weakness extended beyond the information technology sector, with the Vanguard Mega Cap Growth ETF (-1.4%) reflecting broader pressure on large growth-oriented companies. The communication services sector (-0.2%) also finished modestly lower, contributing to the divergence between the technology-heavy Nasdaq and the more resilient DJIA.

Monday's session ultimately reinforced the increasingly divided nature of the market. The steep decline in oil prices and continued rotation into cyclical, defensive, and interest-rate-sensitive stocks provided meaningful support beneath the surface, but that strength was insufficient to prevent another substantial retreat in the major averages as technology selling intensified. The afternoon reversal was particularly notable given the strength of the early rally, suggesting that investors remain willing to reduce exposure to AI-related stocks even when broader market conditions appear favorable. With another busy stretch of earnings ahead, the ability of technology companies to justify elevated expectations and substantial investment commitments remains a central question for the market.

U.S. Treasuries made their way through Monday's trade unscathed, as a sharp drop in oil prices, fueled by speculation of a potential diplomatic solution between the U.S. and Iran, and more struggles for the high-beta stocks drove a bid that led to lower yields across the curve. The 2-year note yield settled down one basis point to 4.58%, and the 10-year note yield settled down three basis points to 4.90%. 

• Russell 2000: +13.1% YTD
• S&P Mid Cap 400: +11.7% YTD
• S&P 500: +10.2% YTD
• Nasdaq Composite: +8.3% YTD
• DJIA: +8.2% YTD

[BRIEFING.COM] Losses across technology and semiconductor stocks continue to widen, leaving the S&P 500 (-0.3%) and Nasdaq Composite (-0.9%) firmly lower with just half an hour remaining in the session. The PHLX Semiconductor Index (-3.3%) has extended its afternoon decline, while the information technology sector (-2.5%) remains a significant drag on the broader market.

Meanwhile, Apple (AAPL 338.65, -5.98, -1.74%) is scheduled to report fiscal Q4 earnings after today's close, with FactSet consensus calling for EPS of $1.99 on revenue of $113.4 billion, representing 11% year-over-year revenue growth. Investors will be closely watching demand for the recently launched iPhone 18 and Duo models, along with commentary on rising memory costs and their implications for margins and product pricing. The report, Apple's first under CEO John Ternus, will also provide an important look at expectations for the holiday quarter, with FactSet forecasting fiscal Q1 revenue of $152.0 billion. The options market is pricing in a move of approximately 5% in either direction following the results.

[BRIEFING.COM] The major averages are on track for a mostly lower finish as continued selling pressure in technology stocks drives the major indices toward their session lows. The broader market has also lost some of its earlier momentum, although the DJIA (+0.7%) remains firmly higher despite retreating from its session highs.

The sharp decline in crude oil prices continues to provide some underlying support, with WTI crude settling $7.55 lower (-7.3%) at $96.51 per barrel. However, the renewed weakness across AI-related stocks and semiconductors is overshadowing that positive influence at the index level, highlighting the persistent caution surrounding the technology trade.

[BRIEFING.COM] The S&P 500 fell to a new session low (7563.71) following the last update, surrendering the entirety of an early 1.1% gain. The Nasdaq Composite is down 0.4%, while the Russell 2000 remains up 0.1%, highlighting the continued divergence between technology-heavy areas and smaller stocks.

Further weakening in mega-cap growth and semiconductor stocks is driving the latest slide. The Vanguard Mega Cap Growth ETF (MGK 86.10, -0.75, -0.86%) has extended its decline from midday, and the VanEck Semiconductor ETF (SMH 511.73, -10.76, -2.06%) has also fallen further as chip stocks struggle to regain traction.

Apple (AAPL 336.57, -8.06, -2.34%) remains a source of pressure ahead of its earnings report after today's close. Semiconductor weakness is unfolding amid continued scrutiny of elevated AI spending and the durability of hardware demand.

[BRIEFING.COM] The market has lost more momentum since the prior update. The S&P 500 is now up 0.2%, while the Nasdaq Composite is nearly unchanged after both held larger gains earlier. The Russell 2000 remains up 0.3%.

The more notable story is beneath the headline averages. The equal-weighted S&P 500 is up 1.0%, an 80-basis-point advantage over the market-cap-weighted index. Broader participation is therefore considerably stronger than the S&P 500's modest gain suggests.

The divergence reflects the inability of the mega-cap cohort to preserve its stronger gains from earlier in the session. Those companies have outsized weights in the conventional S&P 500, so their fading momentum has had a disproportionate impact on that benchmark. The equal-weighted version is less sensitive to those reversals and better reflects gains among companies with smaller index weights.

That pattern also extends beyond today's session. The equal-weighted S&P 500 (+15.1% YTD) is now outperforming the market-cap-weighted S&P 500 (+11.0% YTD) by 410 basis points on a year-to-date basis, underscoring the broader shift away from concentrated mega-cap leadership.

[BRIEFING.COM] The S&P 500 (+0.3%) and Nasdaq Composite (+0.4%) are rebounding from their session lows, though technology stocks remain a point of relative weakness.

Meanwhile, the DJIA (+1.1%) remains firmly higher as falling oil prices drive solid gains throughout the broader market. Sherwin-Williams (SHW 351.54, +18.93, +5.69%) is the best-performing name in the 30-stock average as the broader rotational move out of technology stocks continues to help the stock rebound from an EPS miss last week.

Home Depot (HD 339.48, +10.28, +3.12%) is another outperformer as home-improvement names post gains alongside homebuilders as oil prices and Treasury yields fall today.

[BRIEFING.COM] The S&P 500 (+0.4%) and Nasdaq Composite (+0.4%) continue to retreat from their session highs as technolgoy stocks begin to face pressure, while the DJIA (+1.0%) maintains its solid gain. 

SpaceX (SPCX 140.49, +5.77, +4.28%) is a notable standout amid mixed performance across mega-cap growth stocks, with the Vanguard Mega Cap Growth ETF up a modest 0.3%. Shares are moving higher following a Washington Post report that the company is exploring a potential acquisition of EchoStar Corporation's (ECHO 100.16, +3.22, +3.32%) Boost Mobile business or access to its wireless network. Such an arrangement could accelerate Starlink's expansion into the traditional wireless market by providing an established subscriber base and network infrastructure, although no agreement has been announced.

[BRIEFING.COM] The major averages are trading in a stable range at midday, holding on to the bulk of their earlier gains as strength across the broader market continues to offset some weakness in semiconductor stocks.

The consumer discretionary sector (+3.5%) remains the standout performer, with Marriott International (MAR 416.97, +17.67, +4.42%) adding to the sector's strength following better-than-expected Q3 earnings and an improved outlook. The hotel operator benefited from resilient travel demand across leisure, group, and business customers, with worldwide revenue per available room increasing 6.5% year over year. Marriott also issued above-consensus Q4 earnings guidance and raised its full-year expectations, providing another encouraging indication of consumer spending resilience.

Meanwhile, the PHLX Semiconductor Index (-0.3%) remains in negative territory, reflecting continued uneven performance across the AI-related trade. Tower Semi (TSEM 158.77, -7.71, -4.63%) is among the notable laggards despite reporting strong Q3 revenue growth and issuing above-consensus Q4 revenue guidance. The company's results highlighted robust demand for AI infrastructure and silicon photonics, but its shares remain under pressure amid broader investor scrutiny of elevated growth expectations and the substantial capital investments required to support expanding capacity.

[BRIEFING.COM] The S&P 500 (+0.6%), Nasdaq Composite (+0.9%), and DJIA (+1.0%) are holding on to the bulk of their early gains just before midday, supported by a sharp retreat in oil prices and a rebound across select mega-cap stocks.

Crude oil is down $6.90 (-6.6%) to $97.22 per barrel amid reports that the U.S. favors a diplomatic approach to Iran, temporarily easing concerns about a potential military confrontation following the midterm elections. The energy sector (-2.6%) is firmly lower as a result, though other cyclical sectors are posting solid gains. The consumer discretionary sector (+3.5%) leads the advance as cruise lines, couriers, homebuilders, and other consumer-facing stocks move higher. Additionally, Amazon (AMZN 251.59, +11.24, +4.68%) is a mega-cap standout after Phillip Securities upgraded the stock to buy from accumulate, with a target price of $330.

While NVIDIA (NVDA 206.76, +2.12, +1.04%) also holds a solid gain, performance across the broader AI trade remains choppy after last week's sell-off. The information technology sector (-0.2%) recently followed the PHLX Semiconductor Index (-0.1%) into negative territory after the index climbed to a nearly 2% gain, highlighting the lingering caution surrounding AI-related stocks despite today's broader market rebound. The uneven performance suggests that investors remain selective toward the group following recent concerns about elevated valuations, infrastructure spending, and the sustainability of AI-driven growth.

[BRIEFING.COM] The major averages have slipped slightly from their session highs amid some choppiness in AI-related technology stocks, although the broader market remains firmly higher.

Marvell (MRVL 184.08, -12.32, -6.28%) and Lumentum (LITE 751.66, -89.04, -10.59%) are among the notable laggards after announcing an all-stock merger valued at approximately $115 billion. While the deal would significantly expand Marvell's AI connectivity and optical networking capabilities, investors appear concerned about the substantial share issuance and the execution risks associated with integrating the two businesses. Marvell shareholders would retain approximately 67% ownership of the combined company, with the transaction expected to close in the first half of 2028.

[BRIEFING.COM] The S&P 500 (+1.0%), Nasdaq Composite (-1.4%), and DJIA (+1.2%) are charting session highs as semiconductor stocks begin to wake from a sleepy start. The information technology sector (+0.8%) now holds a solid gain as the PHLX Semiconductor Index (+1.9%) moves higher, with NVIDIA (NVDA 209.80, +5.16, +2.52%) a mega-cap standout.

The ISM Manufacturing Index increased to 55.5% in October (Briefing.com consensus: 54.7%) from 54.5% in September. The dividing line between expansion and contraction is 50.0%, so the October figure suggests manufacturing activity expanded at a faster pace than the prior month.

The key takeaway from the report is that manufacturing activity is still running solidly in the face of ongoing raw material price pressures that threaten to translate into higher prices for customers.

Construction spending declined 1.9% month-over-month in September (Briefing.com consensus: 0.5%) following an upwardly revised 2.0% increase (from 0.9%) in August. On a year-over-year basis, construction spending was down 2.7%.

The key takeaway from the report is that residential spending slumped in September under the weight of higher financing costs.

[BRIEFING.COM] The S&P 500 (+0.6%), Nasdaq Composite (+0.8%), and DJIA (+1.1%) are off to a higher start as falling oil prices and strength in mega-cap stocks help the major averages reclaim some of last week's tech-led declines.

Solid gains across some of the market's largest names are contributing to the advance, with Amazon (AMZN 250.20, +9.85, +4.10%) a standout after Phillip Securities upgraded the stock to buy from accumulate, with a target price of $330. When combined with gains across a host of consumer-facing stocks as oil retreats this morning, the consumer discretionary sector (+2.6%) comfortably leads the seven S&P 500 sectors that trade higher.

Alphabet (GOOG 284.18, +5.96, +2.14%) is also on the rebound, helping the communication services sector (+1.4%) move firmly higher as well. However, performance across the broader technology trade is more mixed, and the information technology sector is flat, while the PHLX Semiconductor Index (+0.3%) is just modestly higher.

Additionally, Apple (AAPL 339.88, -4.75, -1.38%) trades lower ahead of its earnings release after the close.

Despite the muted start from technology stocks, the major averages are still moving higher as crude oil moves $7.20 (-6.9%) lower to $96.92 per barrel. CNBC reports that Secretary of State Marco Rubio says President Trump would rather resolve Iran war "diplomatically" instead of using military force.

The energy sector (-2.5%) is unsurprisingly an early laggard. Meanwhile, the materials (+2.0%), industrials (+1.5%), financials (+1.4%), and consumer staples (+1.1%) sectors all show firm gains amid the retreat in oil prices.

On the data front, the final reading of the October S&P Global U.S. Manufacturing PMI registered at 54.9, down from the prior reading of 56.0.

Construction spending decreased 1.9% month-over-month in September (Briefing.com consensus: 0.5%) following an upwardly revised 2.0% increase (from 0.9%) in August.

The ISM Manufacturing Index increased to 55.5% in October (Briefing.com consensus: 54.7%) from 54.5% in September.

The S&P 500 futures currently trade 43 points above fair value. 

Asian markets finished mostly higher on Monday, although another sharp divergence among technology shares showed that investors remain highly selective toward the AI trade. Japan's Nikkei 225 fell 0.3% for a second consecutive decline, with Screen Holdings (-19%) and Kioxia (-16%) plunging after disappointing outlooks, while Ibiden (-4%), Taiyo Yuden (-3%), and SoftBank Group (-2%) also retreated. China's Shanghai Composite gained 1.1% and the Shenzhen Component rose 1.6% amid reports of expanded regulatory support for stock buybacks, overcoming official October manufacturing and non-manufacturing PMIs that both slipped into contraction, while the private RatingDog manufacturing PMI remained in expansion at 52.0. Hong Kong's Hang Seng gained 0.4%, with Xiaomi (+6%), Tencent (+2%), Lenovo (+2%), Meituan (+2%), and SMIC (+2%) advancing alongside stronger profit growth at China's major state-owned banks. South Korea's KOSPI rallied 2.2% as SK Hynix (+4%) and Samsung Electronics (+2%) rebounded after October exports reached a record $115.3 bln, including a 259% yr/yr surge in semiconductor shipments. The contrast between booming Korean chip exports and disappointing outlooks from Japanese semiconductor companies reinforces an increasingly selective AI trade in which strong industry demand is no longer enough to lift every company exposed to it. India's Sensex climbed 1.7%, adding another pocket of strength to a regional session in which policy support and company-specific fundamentals outweighed China's softer official economic signals.

• In economic data:
  • China's October Manufacturing PMI fell to 49.3 (expected 49.8; prior 50.1).
  • China's October Non-Manufacturing PMI fell to 49.7 (expected 50.5; prior 50.2).
  • China's October RatingDog Manufacturing PMI slipped to 52.0 (expected 52.0; prior 52.1).
  • South Korea's October S&P Global Manufacturing PMI fell to 51.3 (prior 53.9).
  • Japan's October S&P Global Manufacturing PMI fell to 53.3 (expected 53.3; prior 54.1).
  • India's October HSBC Manufacturing PMI fell to 54.7 (expected 54.9; prior 55.1).
  • Australia's October S&P Global Manufacturing PMI held at 49.6 (expected 49.7; prior 49.6).
  • Australia's MI Inflation Gauge increased 0.5% m/m (prior 0.3%).
  • Australia's September Building Approvals increased 5.1% m/m (expected 1.8%; prior -5.2%) and fell 0.8% yr/yr (prior 12.1%).

European markets trade mostly higher as a sharp decline in oil prices eases inflation concerns, although regional economic data and renewed French fiscal worries keep the STOXX Europe 600 near its flat line. Germany's DAX gains 0.2% as October manufacturing activity remains firmly in expansion at 54.2, with Fresenius (+3%), Symrise (+2%), and Siemens Energy among the gainers, while September retail sales unexpectedly fell 2.0% m/m. France's CAC 40 rises 0.3% despite manufacturing activity slipping into contraction and Fitch unexpectedly lowering France's credit outlook to negative, with Sanofi (+5%), L'Oreal (+3%), and Hermes (+2%) offsetting weakness in Societe Generale (-2%), Airbus (-2%), and Safran (-1%). London's FTSE 100 is little changed as the drop in crude prices weighs on BP (-1%) and Shell, reversing some of the energy-driven support that helped the index outperform during last week's technology selloff. The latest manufacturing surveys also reveal a widening regional divide, with activity expanding in Spain and Germany while contracting in Italy and France, even as the broader Eurozone PMI remains above 50. The STOXX Europe 600 is flat, while Italy's FTSE MIB gains 0.5% and Spain's IBEX 35 outperforms with a 1.0% advance.

• In economic data:
  • The Eurozone's October HCOB Manufacturing PMI slipped to 52.7 (expected 52.4; prior 52.9).
  • Germany's October HCOB Manufacturing PMI rose to 54.2 (expected 54.2; prior 53.9).
  • Germany's September Retail Sales fell 2.0% m/m (expected 0.4%; prior 1.2%) and 2.3% yr/yr (prior -0.3%).
  • Spain's October HCOB Manufacturing PMI rose to 52.2 (expected 50.4; prior 51.0).
  • Italy's October HCOB Manufacturing PMI fell to 49.4 (expected 49.9; prior 50.4).
  • France's October HCOB Manufacturing PMI fell to 49.5 (expected 49.3; prior 50.6).
  • The U.K.'s October S&P Global Manufacturing PMI rose to 52.8 (expected 52.8; prior 51.9).
  • Switzerland's October procure.ch Manufacturing PMI rose to 56.7 (expected 55.3; prior 55.3).
  • Switzerland's September Retail Sales increased 1.6% yr/yr (expected 3.0%; prior 3.9%).

S&P 500 futures are trading 30 points above fair value, pointing to a higher open this morning as crude oil prices retreat sharply amid signs of a potential diplomatic breakthrough involving Iran.

WTI crude oil futures are down $4.34 (-4.2%) to $99.78 per barrel following an Axios report that President Trump held a call with Israeli Prime Minister Benjamin Netanyahu, during which Mr. Netanyahu urged the president to launch strikes against Iran immediately after the midterm elections. President Trump, however, reportedly favors allowing diplomatic negotiations to play out before pursuing military action.

Equity futures point to a higher open this morning, with AI-related stocks and semiconductors showing signs of a rebound following last week's sharp losses. The technology-heavy Nasdaq Composite suffered particularly pronounced weakness last week as concerns about AI infrastructure spending and disappointing earnings reactions weighed on growth stocks, although rotation into other areas of the market helped cushion some of the index-level losses.

Earnings will remain a major focus again this week, with FactSet reporting that roughly 20% of S&P 500 companies are scheduled to release quarterly results, providing another important test of investor sentiment toward corporate spending and growth expectations.

Meanwhile, crude oil has retreated below $100 per barrel this morning amid speculation that diplomatic efforts involving Iran are gaining traction. The decline could provide some relief to the broader market following the recent pressure from elevated energy prices.

Today's remaining economic calendar:

• 9:45 AM ET: October S&P Global U.S. Manufacturing PMI - Final; prior 56.0
• 10:00 AM ET: September Construction Spending; Briefing.com consensus 0.5%; prior 0.9%
• 10:00 AM ET: October ISM Manufacturing Index; Briefing.com consensus 54.7; prior 54.5
• 10:00 AM ET: September JOLTs - Job Openings; Briefing.com consensus 7.100M; prior 7.079M

In corporate news:

• Lumentum (LITE 830.00, -10.70, -1.27%) will be acquired by Marvell Technology (MRVL 197.70, +1.30, +0.66%) in an all-stock transaction, while Marvell also narrowed its Q3 guidance range to plus or minus 2% from its previous range of plus or minus 5%.
• Marriott International (MAR 412.43, +13.13, +3.29%) exceeded third-quarter earnings and revenue estimates and issued fourth-quarter earnings guidance above consensus.
• CrowdStrike (CRWD 256.53, +6.10, +2.44%) is trading higher after Deutsche Bank upgraded the stock to Buy from Hold and set a $300 price target.
  
  

Reviewing overnight developments:

Nikkei reported that Asian markets finished mostly higher, although weakness in Japanese semiconductor shares highlighted continued selectivity within the AI trade.

In news:

• Chinese shares benefited from reports of expanded regulatory support for stock buybacks.
• South Korean semiconductor shares advanced after October exports reached a record, including a sharp year-over-year increase in chip shipments.

In economic data:

• China's October Manufacturing PMI 49.3 (expected 49.8; prior 50.1) and Non-Manufacturing PMI 49.7 (expected 50.5; prior 50.2); RatingDog Manufacturing PMI 52.0 (expected 52.0; prior 52.1)
• South Korea's October S&P Global Manufacturing PMI 51.3 (prior 53.9)
• Japan's October S&P Global Manufacturing PMI 53.3 (expected 53.3; prior 54.1)
• India's October HSBC Manufacturing PMI 54.7 (expected 54.9; prior 55.1)
• Australia's October S&P Global Manufacturing PMI 49.6 (expected 49.7; prior 49.6) and MI Inflation Gauge +0.5% m/m (prior +0.3%)
• Australia's September Building Approvals +5.1% m/m (expected +1.8%; prior -5.2%) and -0.8% yr/yr (prior +12.1%)

Equity Markets:

• Japan's Nikkei : -0.3%
• Hong Kong's Hang Seng : +0.4%
• China's Shanghai Composite : +1.1%
• India's Sensex : +1.7%
• South Korea's Kospi : +2.2%
• Australia's All Ordinaries : -0.5%

European markets trade mostly higher as lower oil prices ease inflation concerns, although mixed manufacturing data and renewed French fiscal worries have limited the broader advance.

In news:

• Fitch unexpectedly lowered France's credit outlook to negative.
• Lower crude prices have weighed on major U.K. energy shares.

In economic data:

• Eurozone October HCOB Manufacturing PMI 52.7 (expected 52.4; prior 52.9)
• Germany's October HCOB Manufacturing PMI 54.2 (expected 54.2; prior 53.9); September Retail Sales -2.0% m/m (expected +0.4%; prior +1.2%) and -2.3% yr/yr (prior -0.3%)
• Spain's October HCOB Manufacturing PMI 52.2 (expected 50.4; prior 51.0)
• Italy's October HCOB Manufacturing PMI 49.4 (expected 49.9; prior 50.4)
• France's October HCOB Manufacturing PMI 49.5 (expected 49.3; prior 50.6) U.K. October S&P Global Manufacturing PMI 52.8 (expected 52.8; prior 51.9)
• Switzerland's October procure.ch Manufacturing PMI 56.7 (expected 55.3; prior 55.3) and September Retail Sales +1.6% yr/yr (expected +3.0%; prior +3.9%)

Equity Markets:

• STOXX Europe 600 : flat
• Germany's DAX : +0.2%
• U.K.'s FTSE 100 : flat
• France's CAC 40 : +0.3%
• Italy's FTSE MIB : +0.5%
• Spain's IBEX 35 : +1.0%

[BRIEFING.COM] The stock market ended Friday's session with substantial losses as the ongoing correction in AI-related stocks intensified, sending the major averages lower for the week. The S&P 500 (-1.8%), Nasdaq Composite (-2.9%), and DJIA (-1.1%) recovered somewhat from their afternoon lows but remained firmly in negative territory, with the technology-heavy Nasdaq bearing the brunt of the selling.

The information technology sector (-4.3%) was the worst performer by a wide margin, with the PHLX Semiconductor Index plunging 7.3% and closing below its 200-day moving average. Intel (INTC 65.76, -26.31, -28.58%) suffered a particularly severe post-earnings decline after issuing disappointing Q4 guidance, citing weakening PC demand amid rising memory prices and supply constraints that are limiting its ability to meet robust data center demand. The outlook also weighed heavily on PC manufacturers HP Inc. (HPQ 28.78, -3.05, -9.58%) and Dell (DELL 424.16, -51.35, -10.80%).

Sandisk (SNDK 1151.43, -178.62, -13.43%) was another major semiconductor laggard despite reporting better-than-expected earnings, as relatively modest revenue guidance upside and caution about seasonal demand trends overshadowed exceptional data center growth. NVIDIA (NVDA 204.78, -8.88, -4.16%) also retreated sharply, adding to the pressure on the semiconductor space and reinforcing concerns about increasingly demanding expectations for AI-related companies.

The weakness extended across mega-cap growth stocks, with the Vanguard Mega Cap Growth ETF (-3.1%) reflecting the continued unwinding of the AI trade. Amazon (AMZN 240.35, -3.44, -1.41%) weighed on the consumer discretionary sector (-0.9%) following an earnings miss and negative free cash flow despite accelerating AWS growth and record operating profitability. The company's plans for even greater infrastructure spending in 2027 added to concerns about the returns on massive AI investments.

The communication services sector (-1.1%) also struggled, with Alphabet (GOOG 278.22, -4.10, -1.45%)extending its post-earnings retreat and Reddit (RDDT 91.67, -37.93, -29.27%) suffering a sharp earnings-driven decline. Meanwhile, the industrials sector (-1.6%) faced significant pressure as weakness spread to AI infrastructure-related companies.

Selling pressure intensified steadily throughout the afternoon, briefly pushing the Nasdaq Composite down nearly 4.0% and extending its retreat from its October peak near 27,700 to roughly 9.0%. The index remained decisively below its 50-day moving average near 26,570, while the semiconductor index's break below its 200-day moving average underscored the deterioration in technical momentum.

Unlike Thursday's session, when widespread strength outside mega-cap technology stocks helped offset losses in the major averages, Friday's retreat was considerably broader. The S&P 500 Equal Weighted Index (-0.8%) also finished lower, while small- and mid-cap stocks faced meaningful selling pressure, leaving defensive strength insufficient to counterbalance the losses elsewhere.

The energy sector (+1.9%) was a notable exception, benefiting from continued strength in crude oil prices. WTI crude settled just above $104 per barrel, adding just under $1.00 for the week, while Chevron (CVX 235.48, +4.02, +1.74%) provided additional support after reporting better-than-expected earnings.

Defensive buying also supported the consumer staples sector (+1.4%), with Walmart (WMT 123.51, +2.26, +1.86%), Coca-Cola (KO 94.08, +1.26, +1.36%), and Mondelez Int'l (MDLZ 64.92, +2.39, +3.82%) among the standouts. The utilities (+0.6%), health care (+0.4%), and real estate (+0.2%) sectors managed more modest gains, with strong earnings reactions in Regeneron Pharma (REGN 927.89, +109.12, +13.33%) and Eli Lilly (LLY 1417.54, +43.84, +3.19%) contributing to the resilience of health care stocks.

Treasuries attracted some safe-haven buying despite elevated crude oil prices, providing a measure of support for interest-rate-sensitive areas of the market.

The week's disappointing finish highlighted a deepening correction in the AI trade, with investors increasingly questioning the pace of infrastructure spending, the sustainability of elevated growth expectations, and the ability of companies to translate strong demand into profitable returns. While defensive sectors continued to attract interest, Friday's widespread selling demonstrated that the rotation away from technology stocks is no longer providing enough support to prevent substantial losses across the broader market.

U.S. Treasuries finished the week on a firmly higher note, turning longer tenors positive for the week while shorter tenors extended this week's gains. The 2-year note yield settled down seven basis points to 4.59% (-9 basis points this week), and the 10-year note yield settled down six basis points to 4.93% (-6 basis points this week)

• Russell 2000: +13.3% YTD
• S&P Mid Cap 400: +10.8% YTD
• S&P 500: +10.7% YTD
• Nasdaq Composite: +9.4% YTD
• DJIA: +7.7% YTD

Reviewing today's data:

• The Q3 Employment Cost Index increased 0.8% (Briefing.com consensus 0.8%) to follow a 0.9% increase in Q2, with wages and salaries rising 0.7% while benefits rose 0.9%.
  • The key takeaway is that wages and salaries for civilian workers were up 3.1% year-over-year, maintaining a trend that continues undershooting inflation. This will feed ongoing concerns about pressure on discretionary spending activity.
• Oct Chicago PMI 55.3 (Briefing.com consensus 55.9; Prior 58.8)