U.S. Markets Fall on Fears of Overvaluation
U.S. stock indexes closed lower on Tuesday as the S&P 500 lost 1.17%, the Nasdaq 100 fell 2.07%, and the Dow Jones slipped 0.53%. The broad market index dropped to a 1.5-week low, reflecting rising investor anxiety over excessive valuations in major tech names.
Pressure on Tech Stocks and Palantir
The main drag came from Palantir Technologies, whose shares plunged more than 7% despite strong quarterly results. Investors were alarmed by the company’s sky-high price-to-sales ratio of 85 — the highest in the S&P 500 — sparking profit-taking and a wave of selling across AI and semiconductor stocks.
The “Magnificent Seven” were also hit hard: Tesla fell over 5%, Nvidia and Alphabet lost more than 2%, Amazon and Meta dropped around 1%, and Microsoft slid 0.5%. Apple was the only major tech stock to close slightly higher, up 0.37%.
Semiconductor companies were under heavy pressure as well: Micron and Intel fell more than 5%, while ARM, AMD, and Qualcomm declined between 3% and 4%.
Wall Street Cautions on Market Correction
Investor sentiment weakened after Morgan Stanley and Goldman Sachs warned at a Hong Kong financial summit that equity markets could see a correction of more than 10% within the next 12–24 months. Both banks highlighted that the S&P 500’s 35% rally since April may not be justified by fundamentals.
Macroeconomic Headwinds and Government Shutdown
Even a drop in the 10-year Treasury yield to 4.09% couldn’t lift markets. U.S. October vehicle sales slowed to 15.32 million — the lowest in 14 months — signaling cooling consumer demand. Markets are currently pricing in a 69% chance of a 25-basis-point Fed rate cut in December.
Meanwhile, the ongoing government shutdown — now in its sixth week and the longest in U.S. history — continues to weigh on sentiment and delay key economic data releases, fueling fears of an economic slowdown.
Global Markets and Bonds
Global equities mirrored the U.S. decline: the Euro Stoxx 50 dropped 0.34%, Japan’s Nikkei 225 fell 1.74% from record highs, and China’s Shanghai Composite lost 0.41%. European bonds advanced, with the German 10-year bund yield slipping to 2.65% and the U.K. 10-year gilt yield falling to 4.42%.
ECB officials warned of weak growth prospects and two-sided inflation risks, emphasizing the need for flexibility and avoiding firm commitments on rate paths.
Corporate Earnings and Individual Stock Moves
Earnings season continued at a fast pace. Norwegian Cruise Line plunged 15% after missing revenue expectations, Zoetis fell 13% after cutting guidance, and CDW slid 8% on soft sales.
On the upside, Sanmina surged 16% and Yum! Brands gained 7% after reporting strong quarterly earnings, while Marriott (+3%) and Waters (+6%) also topped expectations and raised forecasts.
Crypto-related stocks dropped sharply as Bitcoin fell over 6% to a 4.5-month low, with Coinbase, Riot, and MicroStrategy each down more than 6%.
Subscribe to stay up to date with the latest events in the financial markets.
Telegram: @bigstakeinvest
Twitter: @BigStakeTrades
Telegram: @bigstakeinvest
Twitter: @BigStakeTrades