Oil prices head higher as initial midterm reaction fades

A motorist fills up at a Costco station in Lone Tree, Colo. (David Zalubowski/AP)

NEW YORK — More drops for AI chip stocks are dragging the U.S. market lower on Nov. 5, even as much of Wall Street rises following strong profit reports from AppLovin, Tapestry and other companies.

In the oil markets, the initial knee-jerk reaction to the midterm results faded. The price of a barrel of Brent crude oil rose 2.5% to $96.95 and recovered a chunk of its nearly 9% drop from the day before. Uncertainty still reigns about what will happen in the war with Iran and when the global energy industry can return to normal.

The S&P 500 fell 2% and erased its rally from the day before, which was its best in three months. The Dow Jones Industrial Average was down 502 points, or 0.9%, as of 10:10 a.m. Eastern time, and the Nasdaq composite was 3.6% lower.

Stock markets worldwide felt pressure from continued drops for companies in the artificial intelligence industry, and South Korea’s Kospi index tumbled 5.3%. Such stocks have been swinging for months on worries that the build out of further AI data centers may slow because of how expensive it’s become to borrow money.

The Nov. 3 U.S. midterm elections added another challenge. The nationwide victories by Democrats raised the possibility that governments could force pauses in construction of more data centers.

Nvidia fell 6.3% and was by far the heaviest weight on the S&P 500, a day after dropping 3.2%. Advanced Micro Devices tumbled 13.1%. CoreWeave, a company that rents access to AI chips to customers over the cloud, fell 10%.

huge losses in gasoline and diesel markets today- retail prices will start passing it on tomorrow and Friday- national average gas price could drop to $3.65/gal with diesel falling to $5.50/gal in weeks ahead based on today's close

— Patrick De Haan (@GasBuddyGuy) November 5, 2026

Such stocks are among the most influential on Wall Street because they've become some of the largest. A 1% move for Nvidia, for example, has more effect on the S&P 500 than almost every other U.S. stock because it's the second-largest by total value.

That allowed the drops for AI chip stocks to drown out gains for much of the rest of the S&P 500, where a slight majority of the stocks actually rose.

AppLovin soared 31.8% after the marketing platform reported both revenue and profit that topped analysts’ expectations. It also approved a program to send up to $3.2 billion to its investors by buying back its own stock, bringing the program’s total potential value to $3.6 billion.

Tapestry rallied 8.3% after the company behind the Coach and Kate Spade brands likewise delivered a stronger profit than expected. It also raised its forecasts for revenue and earnings this fiscal year.

Stock prices tend to follow where corporate profits and interest rates go over the long term, depending on them much more than on who controls what in Washington.

It's hard to minimize the technical damage done to petroleum futures on Tuesday and Wednesday, but here's a Thursday epiphany: The war is not over and global refined products' inventories remain very tight. Tough seasonal backdrop, however.

— Tom Kloza (@TomKloza) November 5, 2026

In the bond market, Treasury yields continued to ease. The yield on the 10-year Treasury fell to 4.86% from 4.90% late Nov. 4. It had been at 4.95% on election night and above 5.30% last month.

The drop came despite some encouraging reports on the U.S. economy. Fewer U.S. workers applied for unemployment benefits last week. A separate report, meanwhile, suggested overall productivity for U.S. workers improved by more during the summer than economists expected. That could help the economy grow without adding pressure to the nation’s high inflation.

In stock markets abroad, indexes were mixed in Europe and Asia. Besides South Korea, Japan's Nikkei 225 also felt the sting of drops for tech and AI-related stocks, falling 1.8%.

London’s FTSE 100 rose 0.4% after the Bank of England increased its main interest rate for the first time in three years to help limit high inflation.

The bank said its next moves on interest rates largely hinge on what happens with the Iran war, which sent oil prices and inflation higher worldwide.

“We’ve seen encouraging news in the past 48 hours,” Bank Gov. Andrew Bailey said at a press briefing. “The best thing that can happen is to resolve the conflict in the Middle East; there’s no question about it.”

AP Business Writer Elaine Kurtenbach contributed to this report.