The S&P 500 (SPY) fell 0.5% as a dramatic reversal in oil prices, falling on hopes for an Iran deal rather than fears of war, triggered a violent rotation out of the stocks that had led the market in recent sessions and into the laggards. Energy (XLE) dropped 3.9% as WTI settled at $96.46 a barrel, down $7.66, and Brent settled at $104.77, down $8.66, after Iran's Supreme Leader granted the government authority to negotiate and reports pointed to a Qatari-mediated breakthrough in talks. Technology (XLK) fell 3.0% and the Nasdaq 100 entered correction territory, down 10% from its October record.

The rotation was stark: Financials (XLF), Consumer Discretionary (XLY), Materials (XLB) and Industrials (XLI) all gained more than 1%, led by homebuilders (ITB +4.6%) and airlines (JETS +4.2%), while chipmakers collapsed. Intel dropped 9.0%, Oracle fell 8.9% after announcing plans to raise $20bn through bond and stock sales, and Marvell Technology sank 13.0% after agreeing to acquire Lumentum Holdings for $115bn in an all-stock deal, a transaction that sent Lumentum down 18.5% and dragged Ciena down 11.4% in sympathy. Gold extended its advance toward $3,950 an ounce even as equities absorbed the sector churn, a sign that the diplomatic optimism driving oil and stocks lower in energy remained unconfirmed.

Diplomatic signals on Iran were mixed throughout the session. Foreign Minister Araqchi said the Strait of Hormuz would reopen if the US accepts Iran's conditions, while a separate source insisted no action would follow until Washington meets all seven of Iran's demands and maintained the strait remains under full Iranian military control. President Pezeshkian said Tehran would pursue dialogue, and Trump told Axios there is no rush to decide on restarting the conflict, later telling reporters there would be no strikes on Iran after the midterms. The International Maritime Organization's chief warned that the official count of at least 123 ships attacked in the strait likely understates the true toll.

Company News

• Marvell Technology agreed to acquire Lumentum Holdings for $115bn in an all-stock deal, with Lumentum shareholders receiving 4.500 Marvell shares per share, a 23.9% premium; Marvell fell 13.0% and Lumentum fell 18.5%.
• Oracle fell 8.9% after filing to offer $10bn of common stock as part of a broader $20bn capital raise.
• IDEXX Laboratories jumped 21.0% after beating EPS estimates and raising full-year revenue and EPS guidance, despite trimming its operating margin outlook.
• Marriott International reported Q3 EPS of $3.02, beating estimates, and raised its full-year RevPAR growth outlook to 4.5-5%, though it flagged continued disruption from the Middle East conflict.
• Estée Lauder beat Q1 estimates and raised its fiscal 2027 sales, margin and EPS outlooks.
• Kimberly-Clark completed its acquisition of Kenvue, converting each Kenvue share into $3.50 cash plus 0.14625 Kimberly-Clark shares.
• Anthropic disclosed roughly $17bn in quarterly revenue against a $23.3bn net loss and $895bn in total committed spend ahead of its planned IPO.
• CNA Financial missed Q3 EPS estimates by $0.48 on unfavorable long-term care reserve charges.
• Salesforce agreed to acquire Cresta, a voice-first customer experience platform.

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