Dow Jones rises 0.4% as oil drops; Nasdaq falls 1.1%

The Dow Jones Industrial Average rose 0.4% to close at 51,983.98 on Monday, 2 November 2026, as a sharp fall in oil prices lifted shares of companies that benefit from cheaper energy. The rest of Wall Street did not follow. The Nasdaq Composite, which is heavy with technology companies, fell 1.1% to 25,164.32, and the broader S&P 500 slipped 0.5% to 7,541.40, its third loss in a row. Oil had its sharpest one-day drop in about three months after reports that Iranian and Qatari officials were discussing a proposal to end the war involving Iran, raising hopes of a diplomatic deal between the United States and Iran.

Monday's session showed two forces pulling the US market in opposite directions. The first is oil. Prices have been high because of the war involving Iran and the risk to shipping through the Strait of Hormuz. When oil falls, companies whose biggest costs are fuel or whose customers spend more when petrol is cheaper, such as airlines, transport firms, retailers and industrial companies, tend to rise. The Dow, which tracks 30 large established companies, has many of these. That is why it gained even as other indexes fell. Eight of the S&P 500's 11 sectors rose; energy, which loses when oil falls, was among the losers.

The second force is technology. Shares of companies tied to artificial intelligence have been falling since October, when the Nasdaq lost 5.3% over the month. Investors are asking whether the huge sums being spent on data centres will pay off. Oracle's drop after announcing it would raise $20 billion fits that worry: raising money to fund AI build-out can dilute existing shareholders or add debt. Apple's fall on slower growth added to the pressure on the large companies that dominate the Nasdaq.

The rise in the VIX is worth noting. The index measures how much movement traders expect in the S&P 500 over the coming month. A reading back above 20 points to more nervousness, even on a day when the Dow went up. US voters also go to the polls in the midterm elections on Tuesday, 3 November, which adds uncertainty about future policy.

For Indian investors, a fall in oil is usually welcome because India imports most of the crude it uses, and cheaper oil eases pressure on the rupee and on inflation. Weakness in US technology shares, on the other hand, is watched closely by Indian IT companies, whose biggest clients are in the United States.

Peepals calculation: The Dow's 0.4% gain against the Nasdaq's 1.1% loss is a gap of about 1.5 percentage points in a single day (0.4 + 1.1 = 1.5). The S&P 500 at 7,541.40 being about 3.6% below its record implies a record close of roughly 7,820 (7,541.40 ÷ 0.964 ≈ 7,823). With the VIX up about 9% to 21.15, it was near 19.4 the session before (21.15 ÷ 1.09 ≈ 19.4). Our calculation from the reported figures.

Short-term: Lower oil prices helped transport, consumer and industrial stocks, while AI-linked technology shares stayed under selling pressure. Markets now face the midterm elections and further company results.

Long-term: The split between "old economy" and technology shares will depend on whether diplomacy keeps oil lower and whether investors regain confidence in AI spending.

Who is affected: US and global investors, Indian investors who hold US shares or funds, Indian IT companies with US clients, and businesses and consumers sensitive to fuel prices.

What to watch next: The US midterm elections on 3 November 2026.

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