By Noel Randewich and Utkarsh Hathi
Nov 3 (Reuters) - The Nasdaq rallied on Tuesday as AI heavyweights rebounded ahead of US midterm election results, while Apple fell after the iPhone maker joined the list of Big Tech companies whose quarterly results failed to impress investors.
Apple dropped 1.8% after it warned that the cost of memory chips would continue to rise, pressuring its holiday-quarter gross margin.
Memory-chip maker Micron Technology added 2.1%, while Nvidia climbed 3% after falling in the
last four sessions.
The broader Philadelphia chips index jumped almost 3%, while AMD gained 5.5% ahead of its quarterly earnings due after the bell.
Microsoft and Amazon each gained about 2%.
"This is a rotation from safe tech, like Apple, into riskier tech, like chipmakers," said Jay Hatfield, chief executive officer at Infrastructure Capital Management. "It's clear dip-buying in a higher-risk, Nasdaq-driven market."
The Nasdaq-100 on Monday ended more than 10% below its October 6 record-high close, confirming that the tech-heavy index has entered a correction as investors worry that massive investments in AI infrastructure are outpacing near-term cash generation.
Shares of Amazon and Alphabet fell sharply last week after their quarterly results deepened investors' concerns about the cost of heavy AI spending.
The S&P 500 is down about 3% from its record-high close on October 6, and it remains up 11% in 2026.
Oil prices slid about 2% to a three-week low as investors weighed talks to end the wars in Ukraine and Iran against worries about additional supply disruptions from recent attacks in both conflicts. Iran and the United States are still far from a deal to end their war, a senior Iranian official told Reuters.
The S&P 500 was up 0.59% at 7,585.95 points.
The Nasdaq jumped 1.06% to 25,431.03 points, while the Dow Jones Industrial Average was down 0.24% at 51,859.84 points.
Six of the 11 S&P 500 sector indexes rose, led by information technology, up 1.49%, followed by a 1.24% gain in industrials.
Gartner dropped 13.6%, while US-listed shares of Thomson Reuters and Shopify fell 7.1% and 4.8%, respectively, after all three reported quarterly results.
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 fell 1.1%, however.
MIDTERM RESULTS ON TAP
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.
"Markets will assess potential implications for fiscal policy, regulation, taxation and government spending. This will be good to put behind us as it has been an anticipated volatility event for quite some time," said Ken Mahoney, CEO of Mahoney Asset Management.
Morgan Stanley analysts said in a note earlier this week that the elections should help remove a major market overhang. They believe a US market correction that began in June is in its "final innings."
Declining stocks outnumbered rising ones within the S&P 500 by a 1.3-to-one ratio.
The S&P 500 posted 10 new highs and one new low; the Nasdaq recorded 48 new highs and 197 new lows.
(Reporting by Noel Randewich in San Francisco and Shashwat Chauhan and Utkarsh Hathi in Bengaluru; Editing by Maju Samuel and Matthew Lewis)
