Stocks were hit across the board on Tuesday as selling in some of the top technology, AI, and Data Center names gained momentum.
After multiple warnings from some of the top Wall Street bankers recently about an overbought market, the “Buy the Dip” investors may be getting a little gun-shy.
With the third-quarter earnings season winding down, economic data will be the main focus, as the question on everyone’s mind is whether there will be a December rate cut.
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The futures are trading modestly higher as we reach the midpoint of the trading week, following a risk-off day on Tuesday that saw all major indices decline. The NASDAQ led the sell-off, closing over 2% lower, sparked by a dramatic drop in Palantir, despite the company posting results and guidance that beat expectations. When the closing bell finally rang, the S&P 500 and the Dow Jones Industrial Average had clawed back some of their losses, closing at 6771 and 47,085, respectively, while the NASDAQ closed at 23,348. Big Short author Michael Burry tossed some gas on the Tuesday dumpster fire by announcing that he was long puts on Palantir Technologies (NASDAQ: PLTR) and NVIDIA (NASDAQ: NVDA). Market pundits cited continued concerns about AI valuation as the reason for the selling. Still, after multiple top Wall Street bankers, such as David Solomon and Jamie Dimon, have warned, the market is likely ahead of itself following a three-year rally. The “Buy the Dip” crowd tried to boost the market early in the day, but was met with even more selling by the close.
As would be expected, yields across the Treasury curve plunged as investors and traders rushed to the safe-haven security of U.S. government debt. The benchmark 10-year bond closed the day at 4.0% while the 30-year long bond was last seen at 4.67%. One thing is for sure: with job openings shrinking to the lowest level since 2021, expectations for a December rate cut may grab a tailwind this week. Numerous Fed Governors have maintained that the current rate is too restrictive, and the job data, combined with other economic news, may soon prove them correct.
Brent Crude and West Texas Intermediate both finished the day lower, as the ripple effect from the equity market sell-off, along with some chatter that the Russian sanctions may not be as severe as initially thought by traders, contributed to the decline. The big winner again was the Natural Gas complex, where spot prices finished the day up 1.15% at $4.31. We have maintained for some time at 24/7 Wall St. that the energy trade for the rest of 2025 and 2026 may very well be in the Natural Gas complex, as power demands for Data Centers driving AI cloud computing may fall into the laps of the top companies in that sector.
finance.yahoo.com
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