U.S. stock futures pointed to a sharply lower open on Tuesday, suggesting that markets may come under renewed pressure after a mixed session at the start of the week.
A major factor behind the weakness is Palantir Technologies (NASDAQ:PLTR), whose shares tumbled 8.2% in premarket trading, weighing heavily on sentiment across the technology sector.
The sharp decline comes despite the data analytics firm reporting better-than-expected quarterly results and raising its revenue forecast, as investors continue to question the stock’s lofty valuation.
“It speaks to just how supercharged Palantir’s share price has been in 2025 that even a set of numbers as impressive as those it produced for its third quarter were insufficient to sustain the momentum,” said Dan Coatsworth, head of markets at AJ Bell.
He added, “Even in the context of the booming AI sector, the company’s valuation has reached high levels as investors have seized on its perceived close links with the Trump administration and AI-driven revenue growth.”
Elsewhere, Uber Technologies (NYSE:UBER) fell in premarket trading despite delivering third-quarter revenue ahead of Wall Street estimates, while Spotify Technology (NYSE:SPOT) looked set for early gains after the music streaming platform beat forecasts with its latest results.
Broader market sentiment also turned cautious following remarks from Goldman Sachs (NYSE:GS) CEO David Solomon, who warned of potential turbulence in equity markets over the next two years.
“It’s likely there’ll be a 10 to 20 percent drawdown in equity markets sometime in the next 12 to 24 months,” Solomon said at the Global Financial Leaders’ Investment Summit in Hong Kong. “Things run, and then they pull back so people can reassess.”
Monday’s session ended mixed: while the Nasdaq and S&P 500 extended gains, the Dow Jones Industrial Average slipped. The Dow fell 226.19 points, or 0.5%, to 47,336.68, the S&P 500 added 0.2% to 6,851.97, and the Nasdaq climbed 0.5% to 23,834.72.
The Nasdaq’s strength was fueled by Amazon (NASDAQ:AMZN), which rose 4% to a record high following a $38 billion cloud computing partnership with OpenAI, granting access to Amazon Web Services infrastructure for AI workloads.
Nvidia (NASDAQ:NVDA) also advanced 2.2% after Microsoft (NASDAQ:MSFT) confirmed it had received export licenses from the Trump administration to supply Nvidia chips to the United Arab Emirates.
Meanwhile, declines in Merck (NYSE:MRK), down 4.1%, alongside Nike (NYSE:NKE), 3M (NYSE:MMM), and Chevron (NYSE:CVX), weighed on the Dow.
Traders appeared hesitant to make large moves ahead of ADP’s private payroll report, set for release Wednesday, which could provide clues on labor market strength amid uncertainty over interest rates and the ongoing government shutdown.
On the data front, the Institute for Supply Management (ISM) reported that U.S. manufacturing contracted faster than expected in October, with its PMI falling to 48.7 from 49.1 in September. Economists had forecast a slight uptick to 49.5.
Among sectors, oil service stocks gained as crude prices edged higher, sending the Philadelphia Oil Service Index up 2.2%. Retail shares also strengthened thanks to Amazon’s surge, while computer hardware stocks advanced and housing stocks lagged.
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