Dow Gains 523 Points as Earnings and Lower Oil Lift Stocks

Major U.S. stock indexes advanced as stronger-than-expected corporate earnings and declining crude oil prices helped investors recover from recent selling pressure tied to artificial intelligence investments. The Dow Jones Industrial Average gained 523 points, or 1%, while the S&P 500 rose 0.4% and the Nasdaq Composite added 0.2%, as traders also monitored developments in the Middle East and concerns about technology companies' borrowing.

Industrial and safety products manufacturer 3M helped drive the Dow higher, with its shares climbing more than 5% after adjusted earnings exceeded expectations and the company raised its full-year guidance. Northrop Grumman shares also advanced 6% after the aerospace and defense contractor reported better-than-expected earnings.

Oil prices retreated, supporting investor sentiment. U.S. West Texas Intermediate crude futures fell less than 1% to around $103 per barrel, while Brent crude futures declined more than 1% to approximately $107 per barrel. Treasury yields also moved lower as investors assessed geopolitical developments.

Artificial intelligence stocks showed signs of recovery after recent losses raised questions about the sustainability of investment in the sector. Micron Technology, Intel and Sandisk each gained around 1%, while Seagate Technology rose 2% and Advanced Micro Devices advanced more than 1%. The VanEck Semiconductor ETF added nearly 1%, and CoreWeave climbed more than 2%.

Earlier market pressure followed a sharp decline in South Korean artificial intelligence company Elice, whose shares fell more than 30% overnight during its public market debut. Concerns about debt levels and demand for AI infrastructure have also weighed on technology stocks.

Jose Torres, senior economist at Interactive Brokers, described the improvement in technology sentiment as a relief for investors following the previous week's market turbulence.

"Improving moods regarding the prospects of modern technology have Wall Street breathing a sigh of relief as participants drop hedges, after the cost of volatility protection soared intraday on Friday, ahead of the intensifying selloff," said Jose Torres, senior economist at Interactive Brokers.

The previous week's selloff had spread beyond technology stocks as investors questioned whether companies were borrowing too heavily to finance artificial intelligence infrastructure. Monday's session had already shown signs of recovery, with the S&P 500 rising 0.4% and the Nasdaq Composite gaining more than 1%. Nvidia advanced 1.4%, Tesla climbed 3.8%, and Alphabet added about 1%.

Despite the broader rebound, some companies faced pressure after releasing quarterly results. GE Aerospace shares fell 2% even though the company reported adjusted earnings of $2.25 per share, exceeding the LSEG analyst estimate of $2.01. Revenue reached $13.29 billion, also above expectations.

GE Aerospace raised its full-year guidance across several measures, but free cash flow of $2.04 billion fell short of the $2.2 billion expectation, according to StreetAccount.

Economic data added another concern for investors as the U.S. housing market weakened. The Commerce Department reported that September housing starts fell 5.2% from August to a seasonally adjusted annual rate of 1.22 million, below the Dow Jones consensus estimate of 1.3 million.

Single-family housing starts declined 4.6% to an annualized rate of 859,000. Building permits totaled an annualized 1.4 million, slightly exceeding the 1.39 million forecast but falling 0.2% from August.

Other corporate results produced mixed reactions. RTX reported third-quarter adjusted earnings of $2.26 per share on revenue of $24.97 billion, exceeding LSEG estimates of $1.78 per share and $24.08 billion in revenue, respectively. Its shares gained 1% before the market opened.

Northrop Grumman reported earnings of $7.89 per share, above the $7.18 estimate, while revenue of $11.12 billion narrowly missed the $11.14 billion consensus. Steel Dynamics shares fell 5.3% after earnings per share and profit margins missed expectations, although its customer backlog increased 50% year over year and extended into 2027.

Credit concerns also persisted around CoreWeave. The spread on its five-year credit default swaps rose to more than 1,121, increasing 2.22% during the day and more than 17% over the previous week. Spreads above 1,000 are generally considered a sign of financial distress.