Wall Street pointed lower in premarket trading as artificial intelligence stocks weighed on markets following Monday's big rally.
Futures for the S&P 500 lost 0.3% while futures for the Dow Jones Industrial Average were flat. Futures for the Nasdaq, where most of the Big Tech companies trade, fell 0.5%.
Nvidia shares slid 2% after technology giant SoftBank Group Corp. announced that it had sold its entire stake in the artificial intelligence chipmaker
last month for $5.83 billion. Softbank shares fell 2%.
Nvidia, which rallied nearly 6% a day earlier, has been by far the strongest force on markets recently. It was a big reason the broader market was able to claw back nearly all of last week's losses on Monday.
There is widespread belief that technology stocks have shot too high due to the mania for artificial intelligence, which some have likened to the 2000 dot-com bubble that ultimately burst. Investors are also betting on the potential for an end to the shutdown and for the U.S. Federal Reserve to cut interest rates.
“Sentiment is everything,” Ipek Ozkardeskaya of Swissquote said in a commentary. “It’s how investors perceive the news: if they’re in a good mood, they interpret it positively; if they’re in a bad mood, they see it negatively. One picture, one word, one data point is enough to twist and turn market mood.”
Roughly four out of every five companies in the S&P 500 that have so far reported their results for the summer have also topped analysts’ profit expectations, according to the data firm FactSet. Companies usually beat analysts’ estimates each quarter, but the pressure was high this time around because they needed to justify the big moves upward for their stock prices since April.
Paramount Skydance climbed 4.2% in after hours trading, even as the entertainment giant missed Wall Street's revenue and profit targets. It was the company's first earnings report since Paramount closed its acquisition of Skydance in early August and investors were apparently encouraged that it raised its 2026 cost-cutting goal to $3 billion from the previous $2 billion.
Elsewhere, in Europe at midday, Germany's DAX rose 0.1%, the CAC 40 in Paris gained 0.8% and Britain's FTSE 100 jumped 0.7%.
In Tokyo, the Nikkei 225 lost 0.1% to 50,842.93.
The U.S. dollar ticked up to 154.18 against the Japanese yen, up from 154.14 yen. Expectations that the government will push back its schedule for trimming Japan's huge national debt, boosting spending, have helped to weaken the yen.
Chinese shares ended mixed. Hong Kong's benchmark Hang Seng index rallied late in the day to gain 0.2%, closing at 26,696.41 and the Shanghai Composite index shed 0.4% to 4,002.76.
South Korea’s Kospi, recovering from last week's sell-off, closed 0.8% higher at 4,106.39.
Australia’s S&P/ASX 200 dropped 0.2% to 8,818.80.
Taiwan’s Taiex fell 0.3%, while the Sensex in India climbed 0.4%.
In energy trading, U.S. benchmark crude oil picked up 35 cents to $60.38 per barrel. Brent crude, the international standard, gained 43 cents to $64.49 per barrel.
