A trader works on the floor of the New York Stock Exchange.
Timothy A. Clary | Afp | Getty Images
Stocks fell Tuesday, pressured by declines in artificial intelligence-related names like Palantir, as investors grow increasingly concerned about valuations in the bull market-leading shares.
The S&P 500 dipped 1.1%, while the Nasdaq Composite lost 1.7%. The Dow Jones Industrial Average lost 294 points, or 0.6%.
Palantir shares shed 7%, even after the software company beat Wall Street’s estimates for the third quarter and gave strong guidance, fueled by growth in its artificial intelligence business. The stock, which has risen more than 150% this year, trades at more than 200 times forward earnings. That means investors in that name and the other AI stocks expect the companies to keep ratcheting up their profit and revenue guidance by a large magnitudes in order to justify continuing to buy the shares.
Oracle, which sports a forward P/E of 35, shed 3%, chipping away at its 50% gain this year. Chipmaker AMD, which has more than doubled this year, lost more than 2%. Other AI stocks such as Nvidia and Amazon pulled back as well.
AI stock gains have driven the S&P 500’s forward price-earnings ratio to above 23, near the highest levels since 2000, per FactSet. As those stocks have lifted the broader market to new heights in recent months, Anthony Saglimbene of Ameriprise said in an interview with CNBC that without a pullback, valuations are beginning to get “really stretched.”
“We haven’t really seen any major corrections or any real pressure on stocks since April,” the firm’s chief market strategist said. “Profits are good, but I think investors are starting to ask themselves, based on the pace of [capital expenditure] investments from some of these key Big Tech companies, ‘Are you going to see the profit growth over the next year to justify the levels of capex?'”
Comments from chief executives at Goldman Sachs and Morgan Stanley added to the loss of confidence among investors Tuesday. Overnight, Goldman’s David Solomon said it’s “likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months.” Morgan Stanley CEO Ted Pick also said: “We should also welcome the possibility that there would be drawdowns, 10 to 15% drawdowns that are not driven by some sort of macro cliff effect.”
“Fundamentals are still good, but I would fully expect that you’re going to see a little bit of some periods of pullback,” Saglimbene told CNBC. “Whether that leads to a 5% or 10% or 15% correction by the end of the year, we’ll have to see.”
Wall Street is coming off a mixed session. The S&P 500 and Nasdaq ended Monday higher, while the Dow fell more than 200 points. The S&P 500 through Monday was only about 1% away from a record having closed above 6,800 for the first time ever last month, a period where the major benchmark tacked on another 2% gain.
More than 300 stocks in the broad-market index closed in the red on Monday, adding to concerns about weak breadth and high levels of tech concentration — particularly after the number of S&P 500 stocks that gained last month was smaller than the amount that declined.
“Breath in the market has been pretty narrow for the last several months,” Saglimbene said. “If there is a slowing momentum or a near-term downturn in AI or tech, there really [aren’t] other areas that have performed as well, and if we don’t have a lot of clear data on the economy, and profitability across the rest of the S&P 500 isn’t as strong, where do you go?”
9 stocks in the S&P 500 trade at new 52-week highs
A customer uses an ATM at a Bank of America branch in Boston, Massachusetts.
Brian Snyder | Reuters
On Tuesday, nine stocks in the S&P 500 traded at new 52-week highs.
Tickers that reached this milestone included:
- Las Vegas Sands Corp trading at levels not seen since May 2023
- Bank of America trading at levels not seen since February 2007
- Wells Fargo trading at all-time high levels back through our history to 1968
- Incyte Corp trading at levels not seen since July 2020
- Expeditors International trading at levels not seen since January 2022
- Leidos Holdings trading at all-time high levels back to the SAIC IPO in October 2006
- Rollins Inc trading all-time highs back to when it began trading on the NYSE in 1968
- DuPont trading at levels not seen since October 2024
- Ventas trading at levels not seen since September 2019
On the other hand, 13 stocks in the benchmark reached new 52-week lows, including:
- Pool Corp trading at lows not seen since June 2020
- Clorox trading at lows not seen since August 2015
- Kimberly-Clark trading at lows not seen since June 2018
- Oneok trading at lows not seen since November 2023
- Erie Indemnity Company trading at levels not seen since November 2023
- Factset Research Systems trading at lows not seen since April 2020
- Fiserv trading at lows not seen since February 2018
- Baxter trading at lows not seen since December 2004
- Zoetis trading at lows not seen since May 2020
- Eastman Chemical trading at lows not seen since April 2020
- International Paper Company trading at lows not seen since May 2024
- Alexandria Real Estate Equities trading at lows not seen since November 2009
- Weyerhaeuser trading at lows not seen since July 2020
— Christopher Hayes, Lisa Kailai Han
Norwegian Cruise Line shares on pace for worst day since April
Shares of Norwegian Cruise Line Holdings dropped nearly 14% in midday trading Tuesday, placing the stock on track for its largest percentage decline in a single day since April 3, 2025, when it slid 16.4%.
NCLH, 1-day
This comes after the cruise operator’s third-quarter revenue of $2.94 billion missed the $3.02 billion that analysts surveyed by LSEG had expected.
Shares of Royal Caribbean and Carnival were also lower in sympathy, falling more than 5% and about 8%, respectively.
— Sean Conlon
Is AI behind the latest job cuts impacting the economy?
Mathisworks | Digitalvision Vectors | Getty Images
Corporate America is getting rocked by historic rounds of white-collar layoffs, leading some to wonder: Has AI finally come for their jobs?
While the proliferation of generative and agentic artificial intelligence is playing a role, recent job cut announcements from companies like Amazon, UPS and Target are about a lot more than just the advance of new technology.
The firms, which each announced layoffs in recent weeks totaling more than 60,000 roles eliminated this year, said they’re trying to cut corporate bloat, streamline operations and adjust to new business models.
But in the absence of the Bureau of Labor Statistics’ monthly jobs report, which has gone dark amid the government shutdown, the layoff announcements have raised questions about the strength of the labor market and if it’s the start of an AI-driven, white-collar recession.
Some companies have outright said they’re replacing workers with AI. Klarna CEO Sebastian Siemiatkowski said in May the company was able to shrink its head count by about 40%, in part because of AI. Duolingo said in April it’ll stop using contractors for work that AI can handle. Salesforce laid off 4,000 customer support roles in September, saying that AI can do 50% of the work at the company.
But experts interviewed by CNBC said some companies could be “AI-washing” their job cuts, blaming layoffs on the new technology to cover up business fumbles and old-fashioned cost cutting. Read more.
— Gabrielle Fonrouge, Annie Palmer, Frank Holland
Evercore downgrades Kimberly-Clark after Kenvue deal
Evercore ISI has moved to the sidelines on Kimberly-Clark, downgrading the stock to in line from outperform Tuesday.
The firm has several concerns about the consumer products giant’s deal to buy Tylenol-maker Kenvue, including whether Kimberly can turn around businesses it is not competing in today.
In addition, the acquisition is a significant distraction as Kimberly is already in the middle of a multi-year restructuring and a complex divestiture of its international tissue and professional operations into a joint venture with Brazil’s Suzano, analyst Javier Escalante said in a note to clients.
Plus, “[t]he potential Tylenol liability is hard for us and investors to put our arms around and represents headline risks,” he wrote.
“Our preliminary math for C2027-28 EPS doesn’t suggest enough upside relative to standalone Kimberly’s consensus estimates as to provide an attractive risk-reward trade-off,” Suzano said.
Kimberly’s agreement to buy Kenvue, announced Monday, totals $40 billion on an equity basis, excluding the impact of debt.
— Michelle Fox
Alex Karp calls investor Michael Burry ‘bats— crazy’ for bets against Palantir, Nvidia
Palantir co-founder and CEO Alex Karp speaks during the Hill & Valley Forum at the US Capitol Visitor Center Auditorium in Washington, DC, on April 30, 2025.
Brendan Smialowski | Afp | Getty Images
Palantir CEO Alex Karp ranted against short-sellers, calling out specifically Michael Burry after a filing revealed the investor of “The Big Short” fame had bets against the AI software company, as well as Nvidia, at the end of the last quarter.
“The two companies he’s shorting are the ones making all the money, which is super weird,” Karp told CNBC’s “Squawk Box.” “The idea that chips and ontology is what you want to short is bats— crazy.”
“He’s actually putting a short on AI… It was us and Nvidia,” Karp added.
When reached via email by CNBC seeking comment on Karp’s remarks, Burry declined to comment. Read more.
— Yun Li, John Melloy
Stocks open in the red Tuesday
Stocks fell on Tuesday morning.
The S&P 500 traded down 1.2% shortly after 9:30 a.m. ET, while the Nasdaq Composite slipped 1.7%. The Dow Jones Industrial Average also pulled back 430 points, or 0.9%.
— Sean Conlon
Stocks making moves premarket
Here are some of the names moving before the opening bell:
- Norwegian Cruise Line Holdings — Shares sank nearly 9% after the cruise operator’s third-quarter revenue of $2.94 billion missed the FactSet consensus estimate of $3.02 billion expected. Royal Caribbean and Carnival fell 3.6% and 4.8%, respectively, in sympathy.
- Sarepta Therapeutics — The biotechnology company tumbled 36% after its late-stage study testing two gene-targeted therapies for Duchenne muscular dystrophy did not meet the main goal.
- Archer-Daniels-Midland — The global agriculture company fell 8% after slashing its adjusted earnings guidance for the full year. However, its third-quarter results topped analyst expectations.
To see more stocks moving in premarket trading, read the full story here.
— Michelle Fox
Spotify jumps after earnings and revenue beat
The Spotify application appears on a smartphone screen in this photo illustration in Athens, Greece, on October 10, 2025.
Nikolas Kokovlis | Nurphoto | Getty Images
Spotify shares popped more than 5% in premarket trading Tuesday after the music streaming service’s earnings and revenue for the third quarter topped Wall Street’s expectations.
The company earned 3.28 in euros per share on revenue of 4.27 billion euros for the period, beating the 1.97 euros per share and 4.23 billion euros that analysts surveyed by LSEG had estimated.
Additionally, total monthly active users gained 11% compared to last year’s period to 713 million. That’s above the 710 million that analysts had expected, per LSEG. The company had also previously forecast 710 million.
SPOT, 1-day
— Sean Conlon
Uber drops despite revenue beat
Omar Marques | Lightrocket | Getty Images
Uber shares fell 4% before the bell even after the ridesharing company beat Wall Street’s third-quarter revenue expectations.
“This was our strongest growth since the end of 2023 and the largest trip volume increase in Uber’s history outside the post-Covid rebound,” CEO Dara Khosrowshahi in prepared remarks.
Revenues jumped 20% from $11.2 billion in the year-ago period. Gross bookings increased 21% to $49.74 billion and surpassed the $48.95 billion expected by StreetAccount.
Net income nearly tripled to $6.6 million, or $3.11 per share, from $2.6 billion, or $1.20 per share, in the year-ago period. Adjusted EBITDA rose 33% to about $2.26 billion and was roughly in line with StreetAccount’s estimate. Read more.
UBER, 1-day
— Samantha Subin
Yum Brands shares rise following latest quarterly results
KFC and Taco Bell restaurants along 118th Avenue in Edmonton, on January 21, 2024, in Edmonton, Alberta, Canada.
Artur Widak | Nurphoto | Getty Images
Yum Brands on Tuesday reported quarterly earnings and revenue growth, fueled by strong demand for Taco Bell and improved U.S. sales for KFC.
The restaurant company also announced plans to review strategic options for Pizza Hut. The embattled pizza chain has struggled to win over diners in recent years. In its home market, pizza fatigue after pandemic lockdowns have led to slumping sales, and rivals like Domino’s Pizza have stolen share from Pizza Hut.
Yum shares rose 2% in premarket trading. Read more.
YUM, 1-day
— Amelia Lucas
Goldman Sachs, Morgan Stanley warn of a market correction
CEOs from Goldman Sachs and Morgan Stanley warned overnight of a possible market correction ahead.
“It’s likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months,” said Goldman Sachs CEO David Solomon at the Global Financial Leaders’ Investment Summit in Hong Kong. “Things run, and then they pull back so people can reassess.”
Ted Pick, Morgan Stanley’s chief executive, note: “We should also welcome the possibility that there would be drawdowns, 10 to 15% drawdowns that are not driven by some sort of macro cliff effect.”
— Lee Ying Shan
Starbucks announces joint venture with Boyu Capital to run China business
American multinational chain, Starbucks Coffee, store in Spain.
Xavi Lopez | Lightrocket | Getty Images
Starbucks on Monday said it is forming a joint venture with Boyu Capital to operate the company’s locations in China, leading shares of the coffee chain higher by 0.4% in after-hours trading.
Under the terms of the deal, Boyu, an alternative asset management firm, will pay Starbucks roughly $4 billion to hold up to a 60% interest in the joint venture. Starbucks will hold a 40% stake and maintain its ability to license the brand and intellectual property to the joint venture.
The announcement comes after Starbucks in recent years has seen its sales in China plummet, first due to the pandemic and later caused by increased competition.
— Pia Singh, Amelia Lucas
U.S. stock futures open little changed
Palantir, Clorox among stocks moving in extended trading Monday
Check out the companies making headlines in after-hours trading.
- Palantir Technologies — Shares of Palantir rose 1% in extended trading after the software company reported quarterly results that beat Wall Street’s estimates, with government sales growing 52% from a year ago. Palantir earned 21 cents per share, after adjustments, on revenue of $1.18 billion for the period, while analysts polled by LSEG expected it to earn 17 cents per share on $1.09 billion in revenue. Palantir also gave better-than-expected fourth-quarter guidance as its commercial business, driven by its AI platform, continues to ramp up.
- Vertex Pharmaceuticals — The biotech stock lost 4% after it reported mixed third-quarter results. Vertex earned $4.80 per share, excluding items, on revenue of $3.08 billion. Although the company’s profit came out lower than the $4.58 per share estimate from analysts surveyed by FactSet, revenue beat the $3.06 billion forecast.
- Clorox — Shares of the cleaning products manufacturer rose more than 4% following the company’s first-quarter results. Clorox posted adjusted earnings of 85 cents per share on revenue of $1.43 billion, while analysts surveyed by LSEG had estimated 79 cents per share and revenue of $1.40 billion. The company also reaffirmed its full-year guidance.
For the full list, read here.
— Pia Singh
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