The S&P 500 and Nasdaq Composite rose on Tuesday as U.S. voters cast ballots in midterm elections, while the Dow Jones Industrial Average traded lower. The market activity coincided with a series of quarterly earnings reports that saw shares of Apple and several software companies fall. Analysts from Morgan Stanley noted that the conclusion of the election could remove a significant source of uncertainty for investors, suggesting a market correction that began in June may be nearing its end.
The market movements occurred amid shifts in U.S. foreign policy and regional tensions. President Donald Trump announced that the United States would cease providing military aid to Israel after the end of 2026 following a deal with Prime Minister Benjamin Netanyahu. Meanwhile, investors monitored conflicting reports regarding Iran; while Reuters reported a drop in oil prices as investors monitored peace deal developments, Stocktwits reported that oil prices and Treasury yields edged higher following reports of U.S. military strikes on Iran’s Qeshm Island late Monday.
Apple shares fell 2% after the company warned that rising memory chip costs would likely impact gross margins during the holiday quarter. Software providers also saw declines, with Gartner dropping 17.2% and both Shopify and Thomson Reuters sliding approximately 10% following their earnings releases. Conversely, chipmakers saw gains, led by a 2.7% rise in Nvidia and a 4% increase in AMD. Palantir Technologies reported third-quarter results that exceeded expectations and raised its year-end revenue forecast, though its stock price fell 4.9%.
The financial impact is already measurable for tech investors, as the Nasdaq-100 entered a technical correction on Monday, falling more than 10% from its record high. This reflects growing investor skepticism regarding whether high spending on artificial intelligence (AI) by major firms is producing sufficient financial returns. For the average household, these market shifts are often reflected in the performance of broad index funds like the SPDR S&P 500 ETF, where retail sentiment was reported as bearish on Tuesday.
In the immediate term, the conclusion of the election is expected to provide clarity on future legislative priorities, as Kim Forrest of Bokeh Capital Partners noted that divided governments typically prevent the passage of new major legislation. Beyond the domestic political outcome, the U.S. economy faces ongoing pressure from high Treasury yields, with the 10-year yield reaching 4.92% on Tuesday. Following the vote, market attention is expected to shift toward forthcoming quarterly earnings from companies like AMD and potential geopolitical developments involving Iran.