WTI crude fell 7.4% to $96.46 on Monday, its biggest drop since July 27 and first close below $100 since October 27. That size of single-day decline has shown up only a handful of times since the Iran conflict began in February.
Both presidents signaled openness to negotiations. The oil premium that had reinforced the hawkish rate case snapped in one session.
Oil's plunge pulled the 10-year Treasury yield to 4.89%, down 5 basis points and the lowest since September 10. The yield has now dropped more than 15 basis points in three sessions from early October highs above 5.30%.
Lower crude eased the inflation premium supporting CME FedWatch's 76% December hike probability. The 2-year edged up to 4.581%, compressing the 2s-10s spread to 31 basis points from 38 last week.
Tuesday's JOLTS release is the next labor-market test.
The Dow gained 0.41% to 51,984 as cheaper oil lifted industrials and defensive sectors. The Nasdaq fell 1.07% to 25,164, extending the chip and AI selloff that cost it 5.3% in October.
Technology dropped 2.95%, second worst of 11 sectors. Eight sectors finished higher.
The S&P 500 fell 0.51% to 7,541, about 3.6% below its October 6 record. Apple's roughly 1% after-hours drop on weak margin guidance adds to the Nasdaq's burden at Tuesday's open.
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ISM manufacturing rose to 55.5 in October from 54.5, topping the 54.6 consensus and marking a 10th straight expansion. Production hit its highest level since November 2021.
The prices-paid index eased to 75.2 from 77.9, reinforcing the deflationary signal from oil. Construction spending fell 1.9%, well below the 0.6% gain expected.
Both readings support the Treasury rally. Friday's October payrolls will test whether the labor side of the economy agrees.
Apple posted $2.10 per share on $114.5 billion in revenue after Monday's close, topping the $1.99 and $113.4 billion consensus. Revenue grew 12% year over year.
iPhone sales jumped 17% in CEO John Ternus's first earnings report. The stock still fell about 1% in extended trading after weak December-quarter margin guidance.
A beat that drew sellers extends the pattern weighing on tech since early October. The Nasdaq sits nearly 9% below its October 6 record.
September JOLTS job openings post at 10:00 a.m. ET, with consensus near 7.10 million versus August's 7.08 million. A soft print would reinforce the case that Monday's bond rally has room to extend.
AMD, Super Micro Computer, and Arista Networks report after the close. AMD's revenue consensus near $13 billion is the biggest chip-demand test since Intel's weak guidance last week.
Midterm Election Day may thin volumes. The open inherits Apple's after-hours slide and the question of whether Monday's Iran signal holds for a second session.
