Stocks Face downward Pressure as AI Rally Questions Mount; Palantir Disappoints Despite Earnings Beat
U.S.stock futures are pointing to a lower open Tuesday, reversing gains from the previous session as investors assess the sustainability of the recent artificial intelligence-driven market rally. Dow Jones Industrial Average futures were down 335 points, or 0.7%, while S&P 500 futures fell 1.0% and Nasdaq 100 contracts tumbled 1.3% as of early trading.
Monday saw gains for both the S&P 500 and Nasdaq, but momentum appears to be shifting even after data analytics firm Palantir reported third-quarter earnings and revenue that exceeded wall Street expectations. The market’s reaction signals a high bar for growth, particularly given Palantir’s extraordinary 173% surge in share price this year, which now values the stock at over 300 times future earnings.
Palantir shares fell more then 4% in after-hours trading following the earnings release. “Thier results were good but markets were disappointed at the lack of company visibility for the whole of 2026,” noted Deutsche Bank macro strategist Jim Reid.
Beyond Palantir, market participants are also focused on the likelihood of a Federal Reserve interest rate cut in December. Uncertainty is compounded by the ongoing government shutdown-now the joint-longest in history-which has halted most economic data releases for over a month.
The yield on the benchmark 10-year Treasury note edged down 2 basis points to 4.09% on Tuesday. The dollar was down 0.1% against a weighted basket of its peers, and gold slid 0.2% to $4,006 an ounce.
