On Tuesday, U.S. stock futures experienced a significant decline, led by the tech sector, as investors grew concerned about inflated valuations amidst the latest round of quarterly earnings reports.
S&P 500 futures (ES=F) fell by 1%, while the Nasdaq 100 (NQ=F) dropped 1.3%. The Dow Jones Industrial Average (YM=F) futures, which include fewer tech stocks, decreased by approximately 0.7%, translating to around 300 points.
Wall Street is increasingly concerned that corporate performances are insufficient to support their elevated market valuations. Consequently, leaders from major banks are warning of a possible market correction. Notably, shares of Palantir (PLTR) plummeted over 5%, despite reporting strong quarterly outcomes, as analysts raised doubts about the stock’s high price-to-earnings ratio.
Doubts regarding the sustainability of this year’s tech-driven rally are surfacing, even though overall earnings seem robust. Stocks are retracting from record highs following a mixed session on Monday that had temporarily boosted Nasdaq (^IXIC) and S&P 500 (^GSPC) values.
Before the market opened, Uber (UBER) announced strong earnings reports; however, its stock still dipped, indicating that investors were expecting even better results. Attention is now focused on chipmaker AMD’s (AMD) upcoming financial report and its involvement in significant AI-related contracts.
Additionally, Norway’s sovereign wealth fund has declared it will vote against the approval of Tesla (TSLA) CEO Elon Musk’s proposed $1 trillion compensation package. This opposition comes from one of Tesla’s most substantial stakeholders.
Moreover, investors are closely monitoring developments in Washington as the U.S. government shutdown extends into its 35th day, tying for the longest in history. This ongoing situation is delaying crucial economic data releases necessary for the Federal Reserve and Wall Street, including a vital jobs report set for release this week.
