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Oil prices decline on hopes for progress on Iran war efforts
Brent crude falls 5.9% to $106.65 a barrel
| Updated:
Oil storage tanks. (Nick Oxford/Bloomberg)
Key Takeaways:
- Oil prices declined on hopes for progress in diplomatic efforts between the U.S. and Iran.
- Iran’s top diplomat said in an interview shared on his Telegram channel over the weekend that Iranian negotiators were in Qatar for talks on a proposal that could reopen the Strait of Hormuz within two days.
- But no direct talks were being held with the U.S.
NEW YORK — The U.S. stock market on Nov. 2 is clawing back some of last week's sell-off that was led by the tech and AI industries.
The S&P 500 rose 0.5%, coming off its third straight losing week, and pulled within 2.6% of its all-time high. The Dow Jones Industrial Average was up 391 points, or 0.8%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.7% higher.
Stocks got a lift from easing prices for oil, which headed back down in their latest yo-yo move on uncertainty about when the war with Iran will allow the global industry to return to normal. The price for a barrel of Brent crude, the international standard, fell 5.9% to $106.65.
Iran said Nov. 2 it had a two-day plan to reopen the Strait of Hormuz, which would help the global energy industry, and resume nuclear talks with the United States. Over the weekend, Iran’s top diplomat said he hoped for “rationality” on the U.S. side as diplomatic efforts seek to avert a return to all-out war.
The price for the most actively traded contract in the Brent market has been veering between roughly $70 and $120 since just before the war began, and it’s been quick to reverse direction.
So have stocks in the artificial intelligence industry. Worries are growing that all the hundreds of billions of dollars Big Tech companies are pouring into AI data centers won’t produce enough productivity and profit to make the investments worth it.
Oil markets down significantly this morning after Trump signaled he favored negotiations and not new attacks on Iran. Oil down ~5%, wholesale gasoline and diesel pointing to roughly 16c/gal decline. the national average could fall under $4 a gallon in the next week barring a course change.
— Patrick De Haan (@GasBuddyGuy) November 2, 2026
The latest profit reports from Alphabet and other Big Tech companies also showed how AI may be dragging on their own businesses. Not only did Google’s parent company burn through more cash during the latest quarter, as measured by something called free cash flow, it also reported slower-than-expected growth in its search business, which raised worries about AI cannibalizing its cash cow.
Alphabet rose 1.7% on Nov. 2, recovering some of its drop of more than 12% from Oct. 29, which was its worst in history.
Other tech giants also held steadier. Nvidia rose 1.4% after its 4.2% slide on Oct. 30 forced it to cede the title as Wall Street’s most valuable stock to Apple.
Outside of AI and tech, several stocks climbed after reporting better profits for the summer than analysts expected.
Marriott International rallied 5.5%, for example, after reporting strength for its hotels around the world. Even in the Middle East, where the war has affected its business, CEO Anthony Capuano said that “trends improved meaningfully” from the spring.
The drop in oil prices, meanwhile, helped to lift stocks of companies with big fuel bills. United Airlines flew 5% higher, Southwest Airlines climbed 3.2% and cruise operator Carnival rose 3.4%.
They helped offset a 5.7% drop for Marvell Technology after it announced a deal to buy Lumentum, which sells lasers and other products that power the networks and infrastructure behind AI and cloud computing.
Marvell said it will give 4.5 of its shares for each Lumentum share, valuing it at roughly $115 billion. Lumentum’s shares dropped 11%.
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In stock markets abroad, indexes were mixed in Europe amid mostly modest moves.
The swings were larger in Asia, where South Korea’s Kospi jumped 2.2% on renewed strength for the tech giants that dominate its market.
In China, indexes rose 1.1% in Shanghai and 0.4% in Hong Kong to recover some of their steep recent losses. Stocks in Shanghai finished October more than 15% below a peak reached in May.
The People’s Bank of China said Nov. 2 that around 100 billion yuan ($15 billion) would be deployed under a new program could help support the market.
AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.
