Big Tech Stocks Lead Wall Street Decline Tuesday/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street stocks dropped Tuesday morning, led by sharp losses in major tech companies like Palantir, Nvidia, and Microsoft. Broader market weakness followed mixed earnings reports and an ongoing federal government shutdown. Tesla also declined as investors opposed CEO Elon Musk’s massive proposed pay package.
Wall Street Markets Quick Looks
- S&P 500 fell 0.7%, Nasdaq dropped 0.9%, and Dow slipped 194 points.
- Major tech stocks—including Palantir, Nvidia, and Microsoft—led the losses.
- Palantir fell 8% despite beating earnings expectations.
- Nvidia declined 1.7%, Microsoft dropped 0.7%.
- Tesla fell 2.7% amid backlash over Elon Musk’s proposed $1 trillion pay plan.
- Zoetis stock plunged 13% after slashing its 2025 sales forecast.
- Norwegian Cruise Line dropped 11% following a mixed earnings report.
- Government shutdown leaves Wall Street without economic updates.
- European and Asian markets were also lower overnight.
- Treasury yields slightly declined, with 10-year at 4.09%.
Tech Stocks Sink Wall Street as Earnings and Shutdown Stall Market Momentum
Wall Street’s major indexes opened lower Tuesday, driven by a wave of selling in heavyweight tech companies that have led the stock market’s 2025 rally so far. Investors turned cautious amid earnings volatility, a lack of new economic data due to the government shutdown, and uncertainty surrounding executive compensation at one of the most high-profile companies in the world.
Big Tech Leads the Market Down
By mid-morning, the S&P 500 had slipped 0.7%, the Nasdaq Composite fell 0.9%, and the Dow Jones Industrial Average was down 194 points, or 0.4%. Tech stocks bore the brunt of the selling, a stark reversal for a sector that has powered most of the year’s gains.
Palantir Technologies, which had more than doubled year-to-date, dropped 8% even after posting quarterly results that topped analyst expectations. Despite strong top-line numbers, investors appear concerned about forward guidance and sustainability of momentum in the AI and data analytics space.
Nvidia, another star performer of 2025, fell 1.7%. Microsoft, whose massive market cap gives it outsized influence on major indexes, slipped 0.7%. These high-valuation tech names have shown particular sensitivity to investor sentiment, and any pullback in confidence has outsized effects on broader index performance.
Earnings Disappointments and Outlook Warnings
Outside of the tech sector, a string of weaker earnings reports and downward revisions added to the bearish tone.
Animal healthcare company Zoetis tumbled 13% after slashing its full-year sales forecast. The company, which had seen strong performance earlier in the year, blamed weaker demand and pricing pressure in key international markets for the downward revision.
Norwegian Cruise Line plunged 11% following a mixed quarterly report. While earnings were in line with estimates, forward guidance failed to meet Wall Street’s expectations, reigniting concerns about the cruise industry’s ability to sustain post-pandemic recovery in the face of rising costs and geopolitical instability.
These results reflect the broader trend of corporate caution heading into the final quarter of the year, with many companies pulling back on guidance amid softening demand and inflationary pressure.
Tesla Hit by Investor Revolt Over Musk’s Pay
Tesla shares were also under pressure, falling 2.7% after Norway’s sovereign wealth fund—one of the company’s major investors—publicly announced it would vote against a proposed pay package for CEO Elon Musk. The compensation proposal could be worth as much as $1 trillion over a 10-year period, depending on performance benchmarks.
The pay plan will be voted on during Tesla’s annual shareholder meeting on Thursday, alongside over a dozen other proposals. However, none have garnered as much attention—or controversy—as the Musk compensation deal. Some investors view the size of the package as excessive and worry it sets a precedent for corporate governance at other large-cap firms.
Macroeconomic Silence Due to Government Shutdown
Market activity on Tuesday was notably influenced by a continued lack of macroeconomic data. With the U.S. federal government still shut down, agencies that typically release key reports—ranging from employment to inflation—have been unable to operate. That leaves investors flying blind and relying on earnings season to guide sentiment.
The shutdown, now stretching beyond a month, has already delayed multiple indicators that typically sway market direction. In this vacuum, corporate performance and investor reactions to executive leadership are taking center stage.
Global Markets and Treasury Yields
The selloff in U.S. equities was mirrored in global markets. European stocks opened lower, with indexes in Germany, France, and the U.K. showing modest losses. Asian markets were also down overnight, reacting to Wall Street’s Monday performance and broader concerns about global economic headwinds.
In the bond market, U.S. Treasury yields edged lower as investors moved into safer assets. The yield on the benchmark 10-year Treasury note slipped slightly to 4.09% from 4.10% the day prior.
Yields have stabilized in recent sessions, but any hints of renewed inflationary pressure—or aggressive monetary policy—could reignite volatility.
Investor Outlook
While Tuesday’s drop doesn’t represent a full-scale correction, it underscores the fragility of recent gains. The combination of big tech volatility, earnings uncertainty, political dysfunction, and central bank ambiguity has created a landscape where gains may be harder to sustain.
With the earnings season continuing and the government shutdown dragging on, investors are likely to remain focused on corporate guidance, sector rotation, and geopolitical developments until a clearer macro picture emerges.
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