WASHINGTON (dpa-AFX) - Stocks staged a recovery attempt an early slump on Tuesday but showed a notable move back to the downside over the course of the trading session. The major averages all moved lower on the day following the mixed performance seen during trading on Monday.
The tech-heavy Nasdaq posted a particularly steep loss on the day, plunging 486.09 points or 2.0 percent to 23,348.64. The S&P 500 also slumped 80.42 points or 1.2 percent to 6,771.55, while the narrower Dow slid 251.44 points or 0.5 percent to 47,085.24.
The sell-off on Wall Street came amid concerns about the valuations of tech stocks, which have helped lead the markets to record highs amid optimism about artificial intelligence.
Palantir Technologies (PLTR) led the way lower, plunging by 8.0 percent even though the software 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) also tumbled by 5.1 percent despite reporting third quarter revenues that exceeded analyst estimates.
On the other hand, shares of Yum! Brands (YUM) surged by 7.3 percent after the fast food giant reported better than expected third quarter results.
The weakness on Wall Street also came 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.'
Sector News
Gold stocks showed a substantial move to the downside on the day, resulting in a 4.5 percent nosedive by the NYSE Arca Gold Bugs Index. The sell-off by gold stocks cane amid a steep drop by the price of the precious metal.
Considerable weakness was also visible among computer hardware stocks, as reflected by the 4.4 percent plunge by the NYSE Arca Computer Hardware Index. The index pulled back off a record closing high.
Semiconductor stocks also moved sharply lower over the course of the session, dragging the Philadelphia Semiconductor Index down by 4.0 percent.
Airline, steel, networking and energy stocks also saw significant weakness, moving lower along with most of the other major sectors.
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 also moved to the downside on the day. The German DAX Index declined by 0.8 percent and the French CAC 40 Index slid by 0.5 percent, although the U.K.'s FTSE 100 Index bucked the downtrend and inched up by 0.1 percent.
In the bond market, treasuries 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, dipped 1.7 basis points to 4.089 percent.
Looking Ahead
Trading on Wednesday may be driven by reaction to payroll processor ADP's report on private sector employment, while a report on service sector activity may also attract attention.
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