Tech Markets: Apple Earnings Loom After Brutal Month for Nasdaq

The Nasdaq 100 suffered its worst monthly performance in more than a year, capping a difficult October for technology and artificial intelligence stocks. The index posted its steepest single-day decline since June on Friday, driven by a sharp selloff that compounded the sector's month-long slide. The S&P 500 technology index recorded its weakest month since early 2025, while the communications sector index saw its largest monthly drop in four years.

Intel led the decline, with shares falling nearly 30% on the week. The company's results missed expectations, and concerns over its cash burn rate exacerbated investor anxiety. Amazon also contributed to the sector's weakness as worries mounted regarding its cash flow. These developments followed a period of stress in high-risk credit markets and pushback against data center expansion plans. Rising costs of capital and shifting political dynamics also played roles in the retreat.

A major cyberattack on the cryptocurrency exchange Binance added to the market's uncertainty. The hack, which occurred late last week, resulted in the theft of approximately $6.3 billion. The exchange resumed operations on Sunday and stated that it had covered most of the stolen funds. Despite this assurance, customer withdrawal requests have increased since the incident.

Attention now turns to Apple, which reports its fiscal fourth-quarter earnings on Monday. The company has largely avoided the hyperscaler frenzy of recent years, focusing instead on its core product lines and high profit margins. Analysts are closely watching how rising chip input prices are affecting those margins. The market will also look to guidance for the upcoming holiday quarter, which is expected to be a key indicator of consumer spending strength.

Analysts project Apple will report a nearly 11% increase in revenue to $113 billion for the quarter. Net profit is expected to rise about 6% to $29 billion. iPhone sales are forecast to climb approximately 15% to $56.5 billion, a slowdown from the roughly 22% growth seen in the previous three months. This moderation is partly due to the reporting period capturing only nine days of sales for the new iPhone 18 Pro models. The company's first foldable device, the iPhone Duo, launched on October 23 and is also included in the quarter.

In other market developments, oil prices retreated slightly from last week's surge, settling around $109 per barrel early Monday. Investors are monitoring the potential for President Trump to resume attacks on Iran following the upcoming election, though further mediation efforts have helped stabilize prices. The US midterms on Tuesday are expected to dominate broader thinking, with polls and betting markets favoring a Democratic clean sweep of both houses of Congress. The Senate race, however, is expected to be close.

The Federal Reserve is expected to signal a further interest rate hike by year-end, according to comments from several officials late last week. Bond markets have primarily reacted to the equity retreat rather than the elevated oil prices. The October US employment report is also on the docket, with economists anticipating a rebound after a surprisingly weak payroll number in the prior month. The Bank of England is also likely to raise interest rates this week.

Traders found a modest footing on Monday, with mixed results in Asian markets and an early rebound of just under 1% in Nasdaq futures. Other scheduled events include the October ISM manufacturing PMI report, a speech by Chicago Fed's Austan Goolsbee, and the Reserve Bank of Australia's interest rate decision. Palantir is also expected to release earnings alongside Apple.