Stock Markets Rally as Oil Prices Fall and Marvell Announces Deal

North American stock markets climbed on Monday as crude oil prices tumbled, driven by optimism that renewed diplomatic talks between the United States and Iran might alleviate supply risks in the Middle East. Canada's main stock index, the TSX, rose 332.75 points, or 1.4%, to finish the afternoon at 35,952.78. Meanwhile, Wall Street also moved higher with the Dow Jones Industrial Average gaining 508.40 points, or 1%, to reach 52,278.71. The S&P 500 recovered 45.33 points to 7,625.40, and the technology-heavy Nasdaq regained 180.83 points to close at 25,617.82.

Investor sentiment received a notable boost from the artificial intelligence sector following the announcement that Marvell Technology has agreed to acquire optical components maker Lumentum in an all-stock deal valued at $115 billion, including debt. The transaction represents one of the largest corporate agreements of 2026, combining Marvell's expertise in custom chip design with Lumentum's high-performance photonic components and lasers. Under the terms of the agreement, Marvell will exchange 4.5 of its shares for one share of Lumentum, valuing Lumentum at $1,132 per share and giving its stockholders roughly 33% ownership in the combined entity.

Matt Murphy, CEO of Marvell, emphasized the strategic importance of the move in positioning the company against competitors like Broadcom. "Infrastructure supporting AI is undergoing a fundamental transformation towards optical connectivity and represents a generational opportunity," Murphy stated. The transaction is expected to close within the first half of 2028, pending regulatory approval and customary closing conditions.

Major technology stocks responded positively to the market developments. Nvidia climbed nearly 2%, Amazon gained more than 4%, and Alphabet rose over 2%. However, market enthusiasm was partially tempered after Oracle announced plans to sell $10 billion in common stock alongside $10 billion in bonds to finance its own artificial intelligence infrastructure expansion. Oracle shares declined by more than 5% during the session.

In economic data released for Canada, the S&P Global Canada Manufacturing PMI fell to 49.6 in October from 51.5 in September, signaling the first contraction in the sector since the beginning of 2026. Despite the manufacturing contraction, Canadian market gains were broad-based across most sectors, with gold and materials leading the advance while energy stocks suffered modest losses.

Elsewhere in the market, Applied Digital shares hit a one-year low in Monday morning trading following commentary from CEO Wes Cummins regarding the company's capital requirements. Cummins noted that the firm still needs to secure financing for approximately 800 megawatts of data center capacity over the next year, having financed less than half of its total 1.4-gigawatt planned capacity thus far. He pushed back against the "neocloud" label, emphasizing that the company builds long-term real estate leases with investment-grade tenants.

Fixed-income considerations and dividend stocks also drew investor attention as market participants navigated recent monetary policy shifts. Following the Federal Reserve's rate hike in September—its first in three years—yields on safer fixed-income investments have risen, creating a competitive environment for traditional dividend-paying blue chip stocks. Analysts continue to evaluate long-term opportunities among established Dividend Kings such as AbbVie and Johnson & Johnson while the broader market braces for a busy week of corporate earnings reports and upcoming political elections.