U.S. Stocks May See Initial Slump As Palantir Plunges

(RTTNews) - Following the mixed performance seen in the previous session, stocks are likely to come under pressure in early trading on Tuesday. The major index futures are currently pointing to a sharply lower open for the markets, with the S&P 500 futures down by 1.2 percent.

A steep drop by shares of Palantir Technologies (PLTR) is likely to weigh on Wall Street, as the software company is plunging by 8.2 percent in pre-market trading.

The slump by Palantir comes amid concerns about the stock's valuation even though the company reported better than expected fiscal fourth quarter results and raised its revenue guidance.

"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."

Ride-hailing and food-delivery company Uber Technologies (UBER) is also seeing significant pre-market weakness despite reporting third quarter revenues that exceeded analyst estimates.

On the other hand, shares of Spotify Technology (SPOT) are likely to see initial strength after the music streaming platform reported better than expected third quarter revenues.

The downward momentum on Wall Street also comes as Goldman Sachs (GS) CEO David Solomon warned of a significant correction by the equity markets over the next 1-2 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."

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of payroll processor ADP's report on private sector employment on Wednesday.

With the ongoing government shutdown indefinitely delaying several key U.S. economic reports, the ADP report could shed light on the strength of the labor market amid uncertainty about the outlook for interest rates.

After ending last Friday's session in positive territory, the major U.S. stock indexes turned in a mixed performance during trading on Monday. While the Nasdaq and the S&P 500 saw further upside, the narrower Dow moved to the downside.

The Dow fell by 226.19 points or 0.5 percent to 47,336.68, but the S&P 500 rose 11.77 points or 0.2 percent to 6,851.97 and the Nasdaq climbed 109.77 points or 0.5 percent to 23,834.72.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index tumbled by 1.7 percent, while China's Shanghai Composite Index fell by 0.4 percent.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.4 percent, the French CAC 40 Index is down by 1.0 percent and the German DAX Index is down by 1.2 percent.

In commodities trading, crude oil futures are slumping $0.86 to $60.19 a barrel after inching up $0.07 to $61.05 a barrel on Monday. Meanwhile, after climbing $17.50 to $4,014 an ounce in the previous session, gold futures are falling $18.80 to $3,995.20 an ounce.

On the currency front, the U.S. dollar is trading at 153.37 yen compared to the 154.21 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1493 compared to yesterday's $1.1518.