Wall Street Ends in the Red as Tech Valuation Fears Shake Markets
Investors remain focused on Nvidia’s third-quarter earnings results, scheduled for release on Wednesday after the closing bell.
Quick overview
- U.S. stocks declined on Tuesday, with the Dow falling 1.07% and the S&P 500 dropping 0.82%.
- Nvidia's shares fell nearly 3%, contributing to market pressure amid concerns over high valuations in the tech sector.
- Amazon experienced the largest decline among major tech companies, dropping over 4%, while Microsoft slid 2.7%.
- Investors are awaiting Nvidia's third-quarter earnings results, which could significantly impact market sentiment.
Market pressure centered on Nvidia, whose shares fell nearly 3%.
U.S. stocks declined again on Tuesday, dragged down by another pullback in technology names as concerns grow over the lofty valuations of companies tied to artificial intelligence.
The Dow Jones Industrial Average fell 1.07% to close at 46,091.68 points, while the S&P 500 dropped 0.82% to 6,617.37 points. The tech-heavy Nasdaq Composite was the hardest hit, sliding 1.21% to 22,432.85 points.
With these moves, both the Dow and the S&P 500 notched their fourth straight session of losses, while the Nasdaq has fallen in three of the past four sessions.
Market pressure was driven largely by Nvidia. Shares of the AI chipmaker fell nearly 3%. Among the “Magnificent Seven,” Amazon posted the steepest decline, dropping more than 4%, while Microsoft slid 2.7%.
The market also digested the announcement of an ambitious alliance that failed to lift the stocks involved. Anthropic said it will invest $30 billion with Microsoft to use its cloud services. In addition, Nvidia and Microsoft will contribute $10 billion and $5 billion, respectively, to the startup.
Investors remain focused on Nvidia’s third-quarter earnings results, scheduled for release on Wednesday after the closing bell. The numbers will be crucial in determining whether the AI boom continues to support sector profits.
If the leading company in the market’s most dynamic segment delivers upbeat guidance and stronger-than-expected earnings, revenue, and margins, it could offer a significant boost to investor sentiment.
Separately, Home Depot shares retreated after the company reported weaker-than-expected results and lowered its guidance for the year.
On Thursday, the September U.S. employment report—delayed due to the prolonged government shutdown—will also be published. Private surveys point to a slowdown in the labor market.
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