By Shashwat Chauhan and Utkarsh Hathi
Nov 3 (Reuters) - The S&P 500 and the Nasdaq were set for a higher open on Tuesday as crude oil prices fell further heading into the US midterm elections, while Apple joined the list of Big Tech companies whose results failed to impress investors.
Apple fell 4.4% in premarket trading after the company warned the cost of memory chips would continue to rise, pressuring its holiday-quarter gross margin.
AI-powered analytics software provider Palantir Technologies forecast
revenue above estimates for the last three months of the year after topping third-quarter expectations. Its shares, however, fell 6.1%.
The Nasdaq-100 closed more than 10% below its all-time closing high on Monday, confirming that the tech-heavy index has entered a correction as investors grow wary of Big Tech's soaring AI spending and little evidence of adequate returns.
Several tech companies have also tapped the bond market to finance big AI investments recently, amplifying concerns that debt-funded spending will become harder to justify as borrowing costs rise.
Helping lift risk appetite on Tuesday was a drop in oil prices, as Brent crude fell 2.4%, extending declines after a sharp drop in the last session as investors monitored developments on a peace deal between the US and Iran.
US President Donald Trump said he made a deal with Israeli Prime Minister Benjamin Netanyahu and that Washington would no longer be providing military aid to Israel after the end of this year.
At 8:42 a.m. ET, Dow E-minis were down 153 points, or 0.29%, and S&P 500 E-minis were up 12.75 points, or 0.17%. Nasdaq 100 E-minis were up 200.25 points, or 0.71%.
Chip stocks were among top gainers, with Nvidia climbing 2.8% after falling for the last four sessions. Following the recent heavy losses in Nvidia, Apple surpassed the chip designer to become the world's most valuable company last week.
AMD gained 4.2% ahead of its quarterly earnings due after the bell, while Marvell Technology and Intel rose 4.6% and 4.3%, respectively.
MIDTERM RESULTS AWAITED
American voters will deliver a verdict on the first two years of President Donald Trump's second term in Tuesday's midterm elections, with polls and nonpartisan analysts favoring Democrats to wrest the House from Republicans, while control of the Senate remains uncertain.
"A divided government seems to be very good for markets because no new legislation can get put through," said Kim Forrest, chief investment officer at Bokeh Capital Partners.
Morgan Stanley analysts said in a note earlier this week that the elections should help remove a major market overhang. They believe the US market correction that began in June is in its "final innings".
Another risk factor could be the US renewing attacks on Iran after the midterms, something that Trump has hinted at in recent weeks. J.P.Morgan analysts said in a note earlier this week that they view any dip in the markets due to geopolitical tensions as a buying opportunity.
However, when asked by reporters on Monday if he was considering striking Iran after the midterms, Trump said "No."
(Reporting by Shashwat Chauhan and Utkarsh Hathi in Bengaluru; Editing by Shinjini Ganguli and Maju Samuel)
