The major index futures indicate a significantly lower opening on Tuesday, suggesting that stocks are poised to face downward pressure after the mixed performance observed in the prior session. A steep drop by shares of Palantir Technologies is likely to weigh, as the software company is plunging by 8.2 percent in pre-market trading. The decline in Palantir’s performance occurs in the context of apprehensions regarding the stock’s valuation, despite the company delivering fiscal fourth quarter results that exceeded expectations and subsequently increasing its revenue guidance. “It illustrates the extent to which Palantir’s share price has been invigorated in 2025 that even a set of figures as remarkable as those it generated for its third quarter were inadequate to maintain the momentum,” stated Dan Coatsworth. He noted, “Even in the context of the booming AI sector, the company’s valuation has reached high levels as investors have seized on its perceived close links with the Trump administration and AI-driven revenue growth.”
Ride-hailing and food-delivery company Uber Technologies is experiencing notable pre-market weakness, even after reporting third quarter revenues that surpassed analyst expectations. Conversely, shares of Spotify Technology are poised for initial strength following the music streaming platform’s announcement of third quarter revenues that exceeded expectations. The downward momentum on market coincides with warnings from David Solomon regarding a substantial correction in equity markets anticipated over the next 1-2 years. “It’s likely there’ll be a 10 to 20 percent drawdown in equity markets sometime in the next 12 to 24 months,” Solomon stated. “Market dynamics exhibit a pattern of momentum followed by a period of consolidation, allowing participants to reevaluate their positions.”
Following a positive close last Friday, the major U.S. stock indexes exhibited a mixed performance during Monday’s trading session. While the Nasdaq and the S&P 500 experienced additional gains, the more concentrated Dow faced a decline. The Dow decreased by 226.19 points, representing a decline of 0.5 percent, settling at 47,336.68. In contrast, the S&P 500 experienced an increase of 11.77 points, or 0.2 percent, reaching 6,851.97, while the Nasdaq advanced by 109.77 points, equivalent to a rise of 0.5 percent, closing at 23,834.72. The gain by the tech-heavy Nasdaq partly reflected a sharp increase by shares of Amazon, with the online retail giant surging by 4.0 percent to a record closing high. Amazon continued its upward momentum from last Friday following the announcement of a $38 billion agreement with OpenAI, which will leverage Amazon Web Services’ premier infrastructure to support and expand OpenAI’s essential artificial intelligence operations. AI darling and market leader Nvidia also jumped by 2.2 percent after software giant Microsoft revealed it has secured export licenses from the Trump administration to ship Nvidia chips to the United Arab Emirates. Meanwhile, a 4.1 percent plunge by shares of Merck weighed on the Dow along with notable declines by Nike, 3M, and Chevron. Traders appeared hesitant to engage in substantial actions prior to the forthcoming release of the payroll processor ADP’s report concerning private sector employment on Wednesday.
The current government shutdown is causing an indefinite postponement of several critical U.S. economic reports. In this context, the ADP report may provide valuable insights into the robustness of the labor market, particularly as uncertainty looms over the future trajectory of interest rates. In U.S. economic news, the Institute for Supply Management released a report indicating that manufacturing activity unexpectedly contracted at a slightly accelerated pace in October. The reports says that its manufacturing PMI decreased to 48.7 in October, following an increase to 49.1 in September. A reading below 50 signifies contraction in the sector. Analysts had anticipated the index would rise to 49.5. Oil service stocks exhibited robust performance, coinciding with a slight uptick in crude oil prices, as evidenced by the Philadelphia Oil Service Index’s increase of 2.2 percent. Significant robustness was evident in retail stocks, propelled by Amazon’s surge, resulting in a 1.7 percent increase in the Dow Jones U.S. Retail Index. Computer hardware stocks exhibited considerable strength during the day, whereas housing stocks experienced a marked decline.