Marvell's $115 billion Lumentum deal and Oracle's $20 billion raise sank chip stocks as the Dow rose on oil's biggest drop since July

Monday started as a relief rally and ended as a split market. A sharp fall in oil lifted most of the stock market, but technology gave back its early gains as investors digested two large AI financing moves and kept selling chipmakers after last week's rout.

How the session ended

The Dow Jones Industrial Average rose 213.67 points, or 0.41%, to 51,983.98, according to AP and Yahoo Finance data. The S&P 500 fell 38.67 points, or 0.51%, to 7,541.40, after erasing a gain that had reached 1.1% early in the day, AP reported. The Nasdaq Composite lost 272.68 points, or 1.07%, to 25,164.32.

The index losses hid a broader advance. AP said the majority of stocks in the S&P 500 climbed. Visa rose 2.88%, Mastercard 3.15% and Home Depot 3.63%, according to Yahoo Finance data, while American Airlines added 3.81% as fuel costs fell.

Marvell bets $115 billion on optics

The biggest deal of the day hit both companies involved. Marvell Technology agreed to buy Lumentum, which makes lasers and optical parts used to move data inside AI data centers, in an all-stock transaction with an enterprise value of about $115 billion, Bloomberg and TradingKey reported. Lumentum holders will receive 4.5 Marvell shares for each share, and Marvell's existing shareholders will own about 67% of the combined company. Bloomberg said the deal is expected to close in the first half of 2028.

Marvell closed down 12.72% at $171.41 and Lumentum fell 18.59% to $684.40, according to Yahoo Finance data. At Marvell's closing price, 4.5 shares were worth about $771, above where Lumentum finished the day.

Oracle's $20 billion raise

Oracle fell 8.76% to $119.22 after filing to raise $20 billion, split between $10 billion of common stock and $10 billion of investment-grade bonds, Bloomberg reported. TechEchelon said proceeds are earmarked for general corporate purposes that may include capital spending and debt repayment. The fundraising had been flagged at the company's investor day the week before, but issuing new shares dilutes existing holders, and the bond sale adds to a debt load investors have been questioning all year.

The chip sell-off continued alongside it. The PHLX semiconductor index fell 3.37% to 10,328.33, according to Yahoo Finance data. Intel lost another 8.8% to $59.97 after last week's record drop, AMD fell 7.52% ahead of its results on Tuesday, and Micron slid 5.78%.

Oil's biggest drop since July

U.S. West Texas Intermediate crude settled down $7.66, or 7.36%, at $96.46 a barrel, Reuters reported, and CNBC said it was the biggest daily loss since July 27. Iran's president said the country's supreme leader had granted the government authority to pursue talks, and President Trump said Iran wants to make a deal that "could happen," according to CNBC. After the settlement, NBC News reported, Trump answered "No" twice when asked whether he was considering striking Iran after the midterms.

Energy producers fell with crude. Exxon Mobil closed down 4.05% at $179.67 and Chevron lost 3.29% to $227.77, Yahoo Finance data show, a reversal after both hit record highs on Friday.

Gold recovered from its one-year low. U.S. gold futures for December delivery settled 1.8% higher at $3,969.60 an ounce, CNBC reported, and spot gold was up about 1.7% near $3,942 late in the day, according to Anadolu Agency.

Rates and the week ahead

The 10-year Treasury yield ended at 4.91%, down from 4.94% on Friday, according to Treasury Department data. Futures implied about a 72% chance of a quarter-point Fed rate increase in December, FinancialMarkets.com reported, after the Fed held its target range at 3.75% to 4.00% last week with two officials dissenting in favor of a hike. The Cboe Volatility Index rose to about 21.

Tuesday brings the midterm elections and AMD's earnings. Friday's October jobs report is expected to show about 55,000 jobs added, according to FinancialMarkets.com. With oil now below $100 and tech still under pressure, the rotation from megacaps into the rest of the market is the trend to watch.