US stock indexes took a hit today, with the S&P 500, Dow Jones Industrials, and Nasdaq 100 all trading lower. Palantir Technologies, a leading AI infrastructure stock, saw a significant drop of over 6% despite reporting strong Q3 sales. The company’s price-to-sales ratio soared to 85, the highest in the S&P 500, sparking concerns about overvaluation and leading to a sell-off in the stock.
Valuation worries are also weighing on the market, with Morgan Stanley and Goldman Sachs cautioning that equity markets could see a pullback of more than 10% in the next 12 to 24 months. The recent surge in stock prices, with the S&P 500 climbing over 35% to a record high, has raised red flags for these Wall Street banks.
On the economic front, lower bond yields provided some support for stocks, with the 10-year T-note yield down to 4.08%. However, US Oct Wards total vehicle sales fell short of expectations, coming in at 15.32 million, the lowest in 14 months.
Looking ahead, the markets are closely watching oral arguments at the Supreme Court regarding President Trump’s reciprocal tariffs. Lower courts have deemed these tariffs illegal, and a ruling from the Supreme Court could impact the future of US trade policy.
In terms of earnings, Q3 corporate reports continue to pour in, with a strong showing of companies beating forecasts. However, profit growth is expected to be the slowest in two years, with sales growth also projected to decelerate.
In overseas markets, stocks are trading lower, with the Euro Stoxx 50, China’s Shanghai Composite, and Japan’s Nikkei Stock 225 all in negative territory.
Interest rates are on the radar, with T-notes gaining support from stock weakness and the ongoing US government shutdown, which is now the longest in history. European government bond yields are also moving lower, with the ECB keeping a close eye on inflation risks and economic growth.
US stock movers include tech giants like Tesla, Nvidia, and Alphabet, as well as semiconductor stocks like Intel, Micron Technology, and ON Semiconductor, which are all facing selling pressure. Crypto stocks are also sliding, with Bitcoin hitting a multi-month low.
On the positive side, companies like Waters Corp, Henry Schein, and Sanmina are posting gains after reporting strong earnings. Yum! Brands, Global Payments, and Marriott International are also trading higher after beating expectations.
Overall, market sentiment remains cautious amid valuation concerns and geopolitical uncertainties, with investors closely monitoring economic data and corporate earnings for further insights into the direction of the markets.
