US Markets Today: S&P 500, Nasdaq Slip Over 1% As AI Darling Palantir Slumps On Valuation Concerns
The major US stock market indices opened in the red on Tuesday after AI giant Palantir Technologies Inc.’s earnings failed to make a positive impact. The US stock market has been experiencing a volatile ride in recent times, and this decline is a continuation of that trend.
S&P 500 and Nasdaq Composite Performance
The S&P 500 opened 1.10% or 75.63 points lower at 6,776.34, while the tech-heavy Nasdaq Composite opened 1.50% or 358.35 points lower at 23,476.37. The Dow Jones Industrial average also opened 0.71% or 337.76 points lower at 46,998.92. As of 8:53 p.m (IST), the Nasdaq traded 0.87% lower, while the S&P 500 and Dow Jones traded 0.56% and 0.19% lower respectively.
Palantir Technologies’ Earnings Disappoint
Although Palantir’s revenue beat analysts’ estimates, the earnings fell short of justifying the company’s high valuations. The price-to-sales ratio stood at 85, and was the highest in the S&P Index as of Friday, according to Bloomberg. This has raised concerns among investors, leading to a decline in the stock price. Gil Luria from D.A. Davidson told Bloomberg that the numbers are ‘disengaged’ from fundamentals and that, ‘This is a company with a $4 billion run rate that’s growing 63%. There’s nothing even remotely close to that, which is how we got to the situation where the valuation is at unprecedented levels.’
Other Tech Stocks Affected
Palantir Technologies’ slumped nearly 10% to $189.25 in the early minutes of trade. Other tech names trading in the red include Intel Corp., which traded 2.55% lower at $38.16; shares of Microsoft Corp. also traded 0.73% lower at 513.08. Besides them, Tesla’s stock also fell more than 4% in early trade.
Sectoral Indices Performance
Seven out of the 11 sectoral indices traded in the red while only four traded higher. This indicates a broad-based decline in the market, with most sectors experiencing a downturn. The Indian stock market has also been affected by the decline in the US market, with the Nifty levels and Sensex news being closely watched by investors.
Commodities and Currencies
After the markets opened, spot gold was trading 1.24% lower at $3,951.93. Crude oil also edged lower, with West Texas Intermediate futures trading 0.77% down at $60.58 a barrel, and Brent Crude slipped 0.71% to $64.43. The Bloomberg Dollar Spot Index rose 0.3%, Euro fell 0.4% to $1.1475, British Pound fell 0.8% to $1.3036, and Japanese Yen rose 0.5% to 153.48 per dollar.
Cryptocurrency Market
Bitcoin, the largest traded cryptocurrency, fell 3.6% to $103,016.75. This decline is a continuation of the volatility experienced by the cryptocurrency market in recent times.
Implications for Indian Investors
The decline in the US market has implications for Indian investors, particularly those who have investments in US-based companies. The US stock market news is closely watched by Indian investors, and any decline in the market can have a ripple effect on the Indian stock market. Therefore, it is essential for Indian investors to stay updated with the latest developments in the US market and to have a diversified investment portfolio to minimize risk.
Conclusion
In conclusion, the US stock market witnessed a decline on Tuesday, with the S&P 500 and Nasdaq Composite falling over 1% due to Palantir Technologies’ earnings failing to impress investors. The decline has implications for Indian investors, and it is essential for them to stay updated with the latest developments in the US market. The Indian stock market news and Nifty today will be closely watched by investors in the coming days.