U.S. stocks faced a downturn on Tuesday as investors assessed a flurry of technology-focused earnings reports while precious metals experienced significant volatility, marking a notable market day as a potential partial government shutdown approached resolution.
The tech-heavy Nasdaq Composite Index experienced a notable decline, dropping 1.4%, with the downturn accelerating as the day progressed. The S&P 500 fell by 0.8%, while the Dow Jones Industrial Average saw a more modest decrease of around 0.3% after enjoying gains the previous day.
Despite an initial boost from Palantir’s surprisingly robust quarterly results—signaling a continued enthusiasm for AI investments—the mood soured quickly. Major tech stocks suffered as Nvidia’s shares fell nearly 3% amid concerns over strained relations with OpenAI. This tension appears to be impacting negotiations, with OpenAI reportedly dissatisfied with Nvidia’s latest AI chip offerings, affecting discussions about a potential $100 billion investment. Additionally, tech giants Amazon and Microsoft also saw their stock prices dip due to an ongoing sell-off within the software sector, driven in part by the announcement of a new productivity tool by AI startup Anthropic.
The challenging sentiment surrounding technology stocks has shifted focus to AMD, whose after-hours earnings report is much anticipated as investors look for insights into the current AI landscape amid fears of excessive spending in the tech sector and concerns over a possible AI bubble. Earnings reports from Amazon and Alphabet later this week are expected to draw significant attention.
In the corporate landscape, PayPal reported earnings and a forecast that fell short of expectations, resulting in a more than 20% drop in its stock price. The payments firm also announced the appointment of Enrique Lores, formerly of HP, as its new CEO. Meanwhile, reports from major companies like Pepsi, Pfizer, and Chipotle are on the horizon.
On a different note, the precious metals market experienced notable swings, with gold prices surging over 6%, marking its most significant daily increase since 2008, following a record drop earlier in the week. Analysts attributed this rebound to a wave of dip-buyers, which also propelled silver prices to a gain of over 9% from previous losses.
Overall, while the tech sector faces headwinds, the sharp rebounds in the precious metals market offer a hopeful sign for investors seeking stability in these tumultuous times.