WASHINGTON (dpa-AFX) - Stocks moved sharply lower early in the trading session on Tuesday but have regained some ground over the course of the day. The major averages have climbed well off their lows of the session, although they remain in negative territory.
After tumbling by as much as 1.7 percent, the tech-heavy Nasdaq is down 239.84 points or 1.0 percent at 23,594.89. The S&P 500 is down 42.10 points or 0.6 percent at 6,809.87 and the Dow is down 117.58 points or 0.3 percent at 47,219.10.
The initial sell-off on Wall Street came amid a steep drop by shares of Palantir Technologies (PLTR), with the software company is plunging by 6.9 percent.
Palantir came under pressure amid concerns about the stock's valuation even though the company reported better than expected fiscal fourth quarter results and raised its revenue guidance.
'It speaks to just how supercharged Palantir's share price has been in 2025 that even a set of numbers as impressive as those it produced for its third quarter were insufficient to sustain the momentum,' said Dan Coatsworth, head of markets at AJ Bell.
He added, '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 (UBER) has also tumbled by 6.3 percent despite reporting third quarter revenues that exceeded analyst estimates.
On the other hand, shares of Yum! Brands (YUM) have surged by 6.0 percent after the fast food giant reported better than expected third quarter results.
The weakness on Wall Street also comes as Goldman Sachs (GS) CEO David Solomon warned of a significant correction by the equity markets 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 said at the Global Financial Leaders' Investment Summit in Hong Kong. 'Things run, and then they pull back so people can reassess.'
However, traders seem reluctant to make more significant moves ahead of the release of payroll processor ADP's report on private sector employment on Wednesday.
With the ongoing government shutdown indefinitely delaying several key U.S. economic reports, the ADP report could shed light on the strength of the labor market amid uncertainty about the outlook for interest rates.
Sector News
Gold stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 3.0 percent.
The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, with gold for December delivery tumbling $45.40 or 1.1 percent to $3,968.60 an ounce.
Considerable weakness is also visible among computer hardware stocks, as reflected by the 2.7 percent plunge by the NYSE Arca Computer Hardware Index. The index is pulling back off a record closing high.
Airline stocks are also seeing significant weakness, resulting in a 2.5 percent slump by the NYSE Arca Airline Index, while steel, energy and networking stocks have also shown notable moves to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index tumbled by 1.7 percent, while China's Shanghai Composite Index fell by 0.4 percent.
Most European stocks have also moved to the downside on the day. While the U.K.'s FTSE 100 Index is just below the unchanged line, the French CAC 40 Index and the German DAX Index are both down by 0.7 percent.
In the bond market, treasuries have moved higher after closing roughly flat for two straight sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.6 basis points at 4.081 percent.
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