Dow Rises 1% as Healthcare Stocks Rally and Oil Drops on Iran Diplomacy Hopes

U.S. stocks finished mixed on October 20 as a broad rally in large-cap healthcare names lifted the Dow Jones Industrial Average while tech weakness kept the Nasdaq slightly negative. The S&P 500 gained 0.29%, the Dow climbed 1.02%, and the Nasdaq slipped 0.02%, with 8 of 11 S&P 500 sectors closing in the green and healthcare leading the advance.

Eli Lilly rose 3.59% to a record high, adding roughly $41 billion in market value, while Merck gained 3.3%, Johnson and Johnson climbed 2.2%, and AbbVie advanced 2.3%. The healthcare strength was the clearest driver of the day's outperformance in the Dow and S&P 500. Apple was the single largest drag, falling 1% after Loop Capital downgraded the stock to Hold citing iPhone demand concerns, erasing approximately $50 billion in market value. Alphabet, Meta, Nvidia, and Microsoft also closed lower, collectively pressuring the Nasdaq.

Salesforce agreed to acquire customer engagement software firm Braze for $5.66 billion, or $47.50 per share in cash, sending Braze shares up 51.70%. 3M surged 5.82% after reporting an earnings beat and announcing a new data center deal with Amazon. General Motors fell 6.83% as rising cost pressures overshadowed otherwise strong truck sales figures. Tesla added 1.54% ahead of its Wednesday earnings report, with investors focused on the company's Optimus robot program and Cybercab rollout.

WTI crude oil dropped 5.35% to $98.11 a barrel as traders priced in optimism around U.S.-Iran diplomatic progress, even as tanker attacks near the Strait of Hormuz continued. The 10-year Treasury yield eased to 5.12%, pulling back from last week's 24-year highs. Separately, housing starts fell 5.2% in September to their lowest level since May 2020, adding to concerns about the rate-sensitive housing sector. Netflix also reported results that disappointed on growth, contributing to pressure on communication services, one of the three sectors that closed lower. SpaceX unexpectedly disclosed financial results during the session, an unusual move that drew attention across markets.