Wall Street tech stocks are likely to make an about-turn on Tuesday, with some analysts talking about an abrupt shift in the market mood.
Futures for the Dow Jones were down 0.6%, while those for the S&P 500 were down 1% and the Nasdaq 100 was called 1.3% lower.
For the Dow, this will extend a decline from the day before, when it fell 0.48%, while reversing gains of 0.17% for the S&P 0.17% and 0.46% for the tech-heavy Nasdaq.
Gains for the S&P and Nasdaq reflected a 1.2% jump for the Magnificent 7 tech giants, while the S&P 500 excluding the Mag-7 fell 0.3% and the equal-weighted S&P 500 also fell 0.3%.
Big tech was lifted by more AI deals, this time involving Amazon and OpenAI, followed by Microsoft doing a deal with former bitcoin miner IREN to provide data center capacity; Nvidia benefiting from Microsoft winning US approval to ship chips to the UAE, and Cipher Mining also signing a $5.5 billion data center deal with Amazon.
European stock indices were weaker across the board on Tuesday, with a 1.2% decline for the benchmarks in Germany and France, while London's FTSE 100 saw some help from a major political speech that lowered the pound and reassured bond markets.
Overnight saw "a bit more negativity take over", said Jim Reid, macro strategist at Deutsche Bank, after Palantir fell over 7% afterhours, with the shares trading down more than 8% ahead of Wednesday's opening bell.
"Their results were good but markets were disappointed at the lack of company visibility for the whole of 2026," he said, as well as investors' spotlight turning on a company with the highest price-to-sales ratio in the S&P at 85.
Palantir stock had risen more than 150% this year, while the index average is a price-to-sales ratio of around 3.5
Investors were also weighing up weak macro data, hawkish Fedspeak, and a government shutdown that’s now the joint-longest in history and from midnight tonight will be the longest ever.
Market analytst Kenny Polcari at Slatestone said: "It looks like the tone has changed from yesterday to today – expect the algo’s to create more chaos – it’s always worse on the way down because buyers will step aside to see just how anxious the sellers get."
He said he suspected the S&P "might test 6775 ish – down about 1.1%.
"And if that fails to hold then the trendline would be the next logical stop, and that is at 6647, down 3% from here. Something that is not out of the question – if they get themselves all worked up. I don’t think it happens today – but I am not ruling it out over the next couple of days.
"Once they focus on a negative headline – then they only focus on the negative headlines (until they don’t)."
More media spotlight will be on US politics today, with the New York City mayoral election, as well as gubernatorial races in New Jersey and Virginia.
Today's earnings include Advanced Micro Devices, Shopify, Uber, Arista Networks, Amgen, Pfizer and Spotify.