Stock Market Today: S&P 500 Rallies 1% as US Manufacturing Hits 55.5

Key takeaways

• S&P 500 rebounds as manufacturing activity accelerates
• US factory PMI reaches 55.5, beating expectations
• Falling oil prices support technology stock recovery

US stocks rallied on November 2 as stronger-than-expected manufacturing data and falling oil prices helped Wall Street recover from the technology-led selloff that dominated October.

The S&P 500 gained approximately 1% in early trading, while the Nasdaq Composite climbed 1.2%, supported by renewed demand for technology shares and improving economic sentiment.

According to the Institute for Supply Management's October report, US manufacturing PMI increased to 55.5 from September's 54.5, exceeding economists' expectations.

The reading marked the sector's tenth consecutive month of expansion, suggesting American industrial activity remains resilient despite elevated borrowing costs and geopolitical uncertainty.

US Manufacturing PMI Hits 55.5 as Factory Production Accelerates

October's manufacturing report revealed stronger production and continued growth in new orders.

The production index increased to 59.0 from 56.7, reaching its highest level since November 2021. New orders rose to 55.5, while employment remained in expansion territory at 52.4.

However, the report also highlighted persistent cost pressures that could complicate the Federal Reserve's inflation outlook.

The prices index declined from 77.9 to 75.2, indicating that manufacturers continued experiencing substantial input-cost increases, although at a slower pace.

Meanwhile, 66% of surveyed business comments expressed negative sentiment, citing tariffs, supply-chain disruptions and geopolitical uncertainty.

The mixed outlook helps explain October's unusual market divergence, when 72% of S&P 500 stocks advanced despite the benchmark declining.

Oil Prices Plunge as Nasdaq and S&P 500 Recover

Energy markets provided another catalyst for Monday's rebound.

Brent crude dropped approximately 6.5% toward $106 per barrel amid reports of renewed diplomatic efforts involving Iran, easing concerns about prolonged supply disruptions.

Lower energy costs could support manufacturers, airlines and consumer businesses while reducing some inflationary pressure.

Technology shares also recovered following October's sharp correction, although the sector remains vulnerable to concerns about excessive artificial intelligence spending.

Those concerns intensified when Intel lost nearly 29% in a single session, demonstrating that booming data-center demand cannot always offset disappointing guidance.

Meanwhile, the broader technology selloff has increasingly reflected worries about whether expensive infrastructure investments will generate sufficient future returns.

Wall Street Faces Another Test From Earnings and Jobs Data

Investors now face several important catalysts that could determine whether November's recovery continues.

Corporate earnings remain particularly important after Amazon's AI investments contributed to a $42 billion free cash flow deficit, highlighting the financial costs of expanding computing infrastructure.

Semiconductor stocks also face scrutiny following Intel's disappointing fourth-quarter revenue forecast, which raised questions about manufacturing capacity and broader technology demand.