Brent Crude Falls 7.6% on Iran Talks Hope as Nasdaq Slips 1%

Brent crude fell 7.63% to $104.77 a barrel on Monday, one of its biggest one-day drops this year, as hopes grew that the United States and Iran may resume peace talks. The slide in the Brent crude price pushed global bond yields lower, but it did not stop a sell-off in technology shares on Wall Street.

The Nasdaq Composite dropped 1.07% and the S&P 500 lost 0.51%. The Dow Jones Industrial Average bucked the trend and rose 0.41%, or about 214 points. Falling oil prices hurt energy producers, while airlines gained. Sherwin-Williams and Home Depot also helped lift the Dow.

The Brent crude price fell after reports that Iran’s supreme leader had given the government some authority to hold talks with Washington. President Donald Trump also softened his tone, saying a deal could happen, even though he had earlier signalled that new attacks on Iran might follow Tuesday’s midterm elections.

Technology shares led the declines. Marvell Technology, Lumentum and Oracle were among the biggest losers, with Marvell down 13% and Lumentum down 19%, Reuters reported. Investors remain uneasy that companies are borrowing heavily to pay for artificial intelligence spending that may prove too large.

Economic data was mixed. A factory activity index beat forecasts, but construction spending fell 1.9% in September. Investors will now watch whether the Brent crude price holds its fall after Tuesday’s US midterm elections, in which Mr Trump’s Republican Party is expected to struggle, partly because of the war and high energy prices.

Central banks in Sweden, Poland, Brazil, Norway, the UK and Mexico are also due to announce rate decisions this week.

Source: Reuters and CNBC