At the close, the Dow Jones Industrial Average fell 251.44 points, or 0.53%, to 47,085.24; the Nasdaq Composite Index dropped 486.09 points, or 2.04%, to 23,348.64; and the S&P 500 Index declined by 80.34 points, or 1.17%, to 6,771.63.
According to Zhitong Finance, on Tuesday, the three major U.S. stock indices collectively plummeted, with the Nasdaq Technology Index closing down over 2.5% and the semiconductor index falling by 4%. Public warnings from several CEOs of Wall Street giants about a potential correction in the U.S. stock market directly fueled investor anxiety.
[U.S. Stocks] At the close, the Dow Jones Industrial Average fell 251.44 points, or 0.53%, to 47,085.24; the Nasdaq Composite Index dropped 486.09 points, or 2.04%, to 23,348.64; and the S&P 500 Index declined by 80.34 points, or 1.17%, to 6,771.63. Six out of the Mag 7 fell, and the Philadelphia Semiconductor Index plummeted by 4%. Microsoft (MSFT.US) fell 0.52%, Meta (META.US) dropped 1.63%, Amazon (AMZN.US) declined 1.84%, Alphabet (GOOGL.US) fell 2.18%, NVIDIA (NVDA.US) dropped 3.96%, and Tesla (TSLA.US) plunged 5.15%.
[European Stocks] The STOXX Europe 600 Index closed down 0.30% at 570.58; the DAX 30 Index in Germany fell 0.76% to 23,949.11; the CAC 40 Index in France declined 0.52% to 8,067.53; and the FTSE 100 Index in the UK rose 0.14% to 9,714.96.
[Crude Oil] Weighed down by a stronger dollar and expectations of oversupply, oil prices fell, ending a four-day winning streak. December WTI crude futures fell 0.8%, settling at $60.56 per barrel, while January Brent crude dropped 0.7% to close at $64.44 per barrel.
[Cryptocurrencies] Bitcoin fell below the $100,000 mark for the first time since June, with intraday losses exceeding 6.5%, dragging down related stocks collectively. Ethereum fell nearly 10%, trading at $3,296.
[U.S. Dollar Index] The ICE U.S. Dollar Index rose 0.38%, hitting an intraday high of 100.255, while the Bloomberg U.S. Dollar Index also climbed 0.38%, reaching an intraday high of 1,226.13.
[Precious Metals] COMEX gold futures fell 1.84% to $3,940.30 per ounce. Spot silver dropped 1.88% to $47.1735 per ounce.
[Macroeconomic News]
The ongoing U.S. government shutdown has now matched the longest duration in history. Entering its sixth week, this crisis has tied the historical record. Election results held on Tuesday in New York City, New Jersey, Virginia, and elsewhere are considered key factors that could alter political dynamics in Washington and break the budget deadlock. With the elections concluded, both parties will shift focus to next year’s mid-term race for congressional control. However, it remains uncertain whether the election results will encourage compromise or deepen partisan divides. The Senate has voted against the temporary funding bills passed by the House more than ten times, with no senator changing their stance. Under Trump's leadership, the Republican Party holds a 53-to-47 majority in the Senate, but most bills require at least seven Democratic votes to meet the 60-vote threshold in the Senate. Democrats have refused to vote in favor, aiming to secure extended subsidies for certain medical insurance programs.
Bitcoin fell below $100,000 for the first time since late June. On Tuesday, Bitcoin's price plummeted, falling below $100,000 for the first time in more than four months as investors, increasingly concerned about the sustainability of elevated valuations in artificial intelligence stocks, dumped this risky asset. Bitcoin fell 6% on the day to $100,870 after dropping as low as $99,966. This marked the first time Bitcoin had fallen below $100,000 since June 23. Ethereum fell nearly 10% on Tuesday to $3,296. Mainstream cryptocurrencies and AI stocks attract many of the same investors, so when one trade falters, both tend to be affected.
The Canadian government led by Chrystia Freeland unveiled its first budget, significantly raising its fiscal deficit forecast for the year. In its inaugural budget released on Tuesday, Freeland's administration committed billions of Canadian dollars toward infrastructure, defense, housing, and trade diversification to mitigate the impact of U.S. tariffs on Canada's economy. Key highlights include an expected fiscal deficit expansion to CAD 78.3 billion ($55.5 billion) for the current fiscal year, compared to the previously forecast deficit of CAD 42.2 billion announced in December 2024. The projected deficits are expected to decrease to CAD 65.4 billion in fiscal year 2026-27, CAD 63.5 billion in 2027-28, CAD 57.9 billion in 2028-29, and CAD 56.6 billion in 2029-30. The debt-to-GDP ratio is projected at 42.4% for this fiscal year, peaking at 43.3% in fiscal year 2028-29 before slightly declining to 43.1% the following year.
Goldman Sachs and Morgan Stanley CEOs Issue Joint Warning: U.S. Equity Market 'Between Fair and Expensive,' 10% Healthy Correction Unavoidable. Morgan Stanley CEO Ted Pick and Goldman Sachs CEO David Solomon, speaking at a financial summit organized by the Hong Kong Monetary Authority, both expressed concerns over the current valuation levels of the U.S. stock market and anticipated significant selling pressure in the near term. Goldman Sachs believes that the equity market could experience a correction of 10% to 20% within the next 12 to 24 months. Morgan Stanley noted that a 10% to 15% correction not driven by a macro cliff effect would be welcome. Both executives emphasized that corrections are a normal feature of market cycles and should be viewed by investors as a healthy development.
Heightened Funding Pressures in Money Markets Lead Wall Street to Bet on Temporary Liquidity Injection by the Federal Reserve. Analysts on Wall Street indicated that liquidity strains in the U.S. money markets may persist into November, with elevated funding costs potentially forcing the Federal Reserve to begin increasing liquidity injections ahead of the formal halt to quantitative tightening next month. Last Friday, the money markets experienced a volatile month-end, with the Secured Overnight Financing Rate (SOFR) surging by 18 basis points in a single day—the largest daily increase outside of a rate-hike cycle since March 2020. Although SOFR declined on Monday as month-end pressures eased, it remained above the Federal Reserve’s key policy rate, including the federal funds rate. Other short-term overnight repo rates also stayed persistently higher than the central bank’s policy tool rate.
[Stock News]
AMD (AMD.US) Revenue Surpasses Expectations but Guidance Fails to Impress Investors, Stock Declines in After-Hours Trading. Following a surge in AMD's share price driven by a new wave of major AI compute procurement orders that captivated the market, the company’s latest official guidance data failed to impress institutional investors on Wall Street. The midpoint of AMD's fourth-quarter revenue guidance is approximately $9.6 billion—within a range of $9.3 billion to $9.9 billion. The company expects a gross margin of around 54.5% on a non-GAAP basis for Q4, in line with analysts' average estimates. AMD reported total revenue growth of 36% year-over-year to $9.25 billion in Q3, surpassing the Wall Street consensus of $8.7 billion. Excluding certain items, AMD's adjusted earnings per share (EPS) were $1.20 in Q3, according to compiled data, exceeding analysts' average estimate of $1.17 per share, compared to an adjusted EPS of just $0.92 in the same period last year.
Strong AI Capital Expenditures Propel Arista Networks (ANET.US) to Beat Q3 Revenue and Profit Estimates. Driven by robust AI-related capital spending, Arista Networks reported better-than-expected financial results for the third quarter. Despite this, the stock plummeted 10% during after-hours trading. For the quarter ended September 30, the company’s adjusted earnings per share (EPS) came in at $0.75, surpassing the consensus estimate of $0.71. GAAP EPS was $0.67, also exceeding expectations of $0.66. Total quarterly revenue reached $2.31 billion, a 27% year-over-year increase and above market expectations of $2.27 billion. Adjusted gross margin reached 65.2%, outperforming forecasts by one percentage point. Looking ahead, the company anticipates Q4 revenue between $2.3 billion and $2.4 billion, with a midpoint of $2.35 billion slightly above market expectations of $2.33 billion. Adjusted gross margin is projected to be between 62% and 63%, compared to market expectations of 63.2%, while the adjusted operating margin is expected to range from 47% to 48%.
Tempus AI (TEM.US) Reports Q3 Revenue of $334.2 Million, Up 84.7% Year-over-Year. Gross profit reached $209.9 million, surging 98.4% year-over-year. The company reported a net loss of $80 million for the period, widening from a net loss of $75.8 million in Q3 2024. However, it is worth noting that this quarter’s loss includes a $35 million stock-based compensation expense, employer payroll taxes, increased amortization expenses related to the acquisition of Ambry, and a one-time $12 million debt extinguishment loss. Net loss per share attributable to common shareholders (both basic and diluted) was $0.46, unchanged from the prior year; non-GAAP net loss per share improved to $0.11 from $0.24 in the same period last year.
"The Big Short" Michael Burry Warns of AI Bubble, Fund Takes Short Position in NVIDIA. Scion Asset Management, led by Michael Burry, disclosed bearish positions in NVIDIA and Palantir Technologies Inc., just days after the hedge fund manager issued a cryptic warning to retail investors on social media, hinting at excessive market exuberance. According to a 13F regulatory filing released on Monday, Burry purchased put options on NVIDIA and Palantir. Scion also revealed call option positions in Halliburton Co. and Pfizer. It remains unclear whether these holdings represent standalone positions or are part of a spread strategy (i.e., simultaneously buying one option and selling another). Since 13F filings only require disclosure of long positions, any sold portions of an options combination strategy employed by Burry will not appear in the filing. Similarly, any short positions or over-the-counter swaps established for hedging purposes will also not be reflected in the document.