Nasdaq sputters as AI startup moves and software weakness hit

4:15pm: Software sell-off

Wall Street closed deep in the red Tuesday as investors digested a wave of tech-focused earnings while precious metals staged a dramatic rebound, and the threat of a government shutdown edged closer to resolution.

The Nasdaq bore the brunt of selling, dropping 1.4% to 23,255, while the S&P 500 fell 0.8% to 6,918. The Dow Jones slipped 0.3% to 49,241, and the Russell 2000 managed a rare bright spot, rising 0.2% to 2,646.

Tech stocks were in focus once again. Nvidia slid nearly 3% amid signs of cooling relations with OpenAI as the AI startup expressed dissatisfaction with the chipmaker’s latest products, slowing talks on a potential $100 billion investment. Amazon and Microsoft also fell, weighed down by a broader sell-off in software shares. Tuesday’s tech dip followed news that AI startup Anthropic rolled out a productivity tool aimed at in-house lawyers.

Meanwhile, precious metals stole the spotlight. Gold soared over 6%, marking its largest daily gain since 2008, bouncing back from Friday’s record-breaking drop. Silver mirrored the move, surging more than 9% as dip-buyers returned to the market.

Investors will now look to after-hours earnings from AMD and Chipotle for fresh cues.

3:40pm: Proactive news headlines

• MustGrow Biologics Corp. (TSX-V:MGRO, OTCQB:MGROF, FRA:0C0) announced positive two-year field-trial results for TerraMG, a mustard-derived biocontrol product, testing on nearly 100 acres of canola in the Canadian Prairies to combat clubroot.
• Millennial Potash Corp (TSX-V:MLP, OTCQB:MLPNF, FRA:XOD) appointed Jack Scott as senior VP, project development, to bolster financing and infrastructure for its Banio Potash Project in Gabon, supporting DFS work.
• M2i Global Inc (OTC:MTWO) announced Nimy Resources has begun its first shipment of high-grade gallium ore from Western Australia to the U.S. for refinement analysis under their collaboration.
• NextSource Materials Inc. (TSX:NEXT, OTCQB:NSRCF) signed a non-binding LOI with Japan’s Hanwa Co Ltd and JOGMEC for up to $30 million in Phase 1 funding for a UAE battery anode facility, potentially yielding up to 15% equity stakes through a joint SPV.
• Nextech3D.AI (CSE:NTAR, OTCQX:NEXCF, FRA:1SS) reported Krafty Lab expansion for international in-person events and signs a Tier 1 enterprise starter agreement with a multinational bank for a pilot program across three countries.
• Virtuix Holdings Inc (NASDAQ:VTIX) integrated Gaussian splatting AI into its VTW system to accelerate creation of realistic 3D battlefield simulations for defense training.

2:40pm: Market movers

• Figure Technology Solutions shares tumbled after Bank of America downgraded the fintech firm, arguing that its sharp post-IPO rally has already priced in much of its future growth.
• Novo Nordisk (NYSE:NVO) shares slid as the drugmaker warned of declining sales and profit in 2026 due to U.S. price cuts and loss of exclusivity for key GLP-1 drugs.
• Walmart Inc (NYSE:WMT, XETRA:WMT) reached a landmark valuation above $1 trillion as its shares climbed, making it one of the few non-technology companies to hit the milestone.
• Teradyne shares surged after the chip-testing equipment maker posted a strong quarterly earnings and revenue beat fueled by AI-driven demand.
• Capri Holdings shares fell despite an earnings beat as investors focused on declining revenue and ongoing margin pressures at the luxury group.
• M2i Global Inc (OTC:MTWO) and Volato Group advanced their strategic supply efforts as Nimy Resources shipped its first batch of high-grade gallium ore from Australia to the United States for defense and research use.
• JD Sports Fashion PLC (LSE:JD., OTC:JDSPY) shares dropped after Deutsche Bank warned of a more challenging 2026 and cut its price target, citing continued earnings pressure.
• PepsiCo Inc (NASDAQ:PEP, XETRA:PEP) announced price cuts on major snack brands to address consumer pushback, even as it reported stronger-than-expected quarterly earnings.
• PayPal Holdings Inc (NASDAQ:PYPL, XETRA:2PP) shares plunged after the payments company missed fourth-quarter estimates, overshadowing steady full-year growth and platform diversification progress.
• Pfizer Inc (NYSE:PFE, XETRA:PFE) shares fell despite an earnings beat as investors weighed declining COVID-19 product sales and longer-term growth concerns.

1:30pm: Disney faces softer outlook: BofA

Walt Disney Co. delivered a stronger-than-expected start to fiscal 2026, but analysts at Bank of America cautioned that near-term momentum looks softer, prompting them to trim their price objective while maintaining a bullish long-term view.

The analysts said Disney’s fiscal first-quarter results beat expectations across revenue, operating income and adjusted earnings, reinforcing confidence in management’s strategy. However, they flagged second-quarter guidance as weaker than both their own and Street forecasts, particularly in Entertainment and Sports, which they said implies a “significant” earnings ramp in the second half of the year.

While Disney reiterated its full-year outlook for double-digit adjusted EPS growth, BofA noted that headwinds at the parks—including softer international visitation and pre-launch costs tied to new attractions and cruise capacity—along with higher sports rights expenses, are likely to weigh on near-term results.

BofA reiterated its Buy rating but cut its price objective to $125 from $140, citing a lower valuation multiple. The firm said its positive stance is underpinned by expectations for improving profitability in direct-to-consumer streaming, a reacceleration in the Parks business, and multi-year growth drivers at ESPN that it believes will reinforce Disney’s long-term earnings power.

12:10pm: Gold, silver recover

Risk appetite is showing signs of recovery as investors step back into gold and silver, Swissquote analyst Ipek Ozkardeskaya said. “Precious metals were already licking their wounds and starting to feel better, as buyers stepped in to rebuild exposure on a dip — a dip close to the 50-day moving average for both metals,” she noted. Gold’s 50-DMA is more than 20% below last week’s peak, while silver’s is nearly 40% lower.

Ozkardeskaya said the 50-DMA has revived buying interest: “We still don’t know whether this marks the end of the metals debacle, but dip-buyers clearly re-emerge when gold and silver move below their 50-DMA levels.”

While gold volatility is cooling, she warned the metal is acting more like a risky asset than a traditional safe haven. “Highly speculative, leveraged positioning is largely responsible… It will be interesting to see whether the latest slump helps temper gold’s meme-like symptoms and restores its reputation as a boring, low-risk safe-haven asset,” she said.

11:15am: SpaceX-xAI merger fuels IPO rumors

The merger between SpaceX and xai adds weight to speculation that SpaceX is preparing for an Initial Public Offering.

Emily Zheng of PitchBook said consolidation “allows SpaceX to present a differentiated, capital-efficient growth narrative to public investors”.

In his memo, Musk suggested space infrastructure would be critical for AI, calling space-based data centres the “immediate focus” and a step towards “self-growing bases on the Moon” and beyond.

Financial terms were not disclosed, but sources familiar with the transaction have been cited as saying it valued xAI at $125 billion and SpaceX at $1 trillion, making SpaceX the most valuable private company in history.

10:40am: PayPal plunges

PayPal shares dropped 18% to around $43 in early trading after the payments company reported fourth-quarter results that fell short of Wall Street expectations.

Q4 revenue came in at $8.68 billion versus the $8.79 billion consensus, while non-GAAP earnings per share were $1.23, below the $1.29 forecast. Total payment volume rose 9% to $475.1 billion, and active accounts reached 439 million, though transactions per account fell 5%.

For 2025, revenue increased 4% to $33.2 billion and non-GAAP EPS rose 14% to $5.31. Interim CEO Jamie Miller cited execution challenges, particularly in branded checkout. PayPal expects mid-single-digit EPS declines in Q1 2026.

Enrique Lores will take over as CEO on March 1.

10am: Wall Street quickly falls into red after positive open

US stocks initially opened positively, but most were not able to sustain this, with the Nasdaq down 0.7% and the S&P 500 falling 0.3%.

The Dow Jones is now flat, having been up 0.25% as first trades were made.

Biggest faller on the Nasdaq 100 is PayPal, down 17.5%, after ditching its CEO.

Thomson Reuters is down 10.8% on AI worries that have also hit a number of others in Europe, including business publishers RELX, Informa and LSEG.

8.15am: Dollar holds onto gains

US stock futures were mostly green ahead of the opening bell on Tuesday, while the dollar was also holding onto recent gains.

It was also confirmed by the Bureau of Labor Statistics that the monthly jobs report scheduled for the end of the week will not be published on time due to the government shutdown.

S&P 500 and Nasdaq futures were up 0.3% and 0.5% higher, while Dow Jones futures were just about flat, up 0.04%.

US stocks closed the previous session on a cheerful note, with the Dow jumping 515 points or 1.1% to 49,408. The S&P added 0.5% to finish at 6,976, while the Nasdaq climbed 0.6% to 23,592. The small cap Russell 2000 rose 1% to 2,640.

After publishing bumper earnings overnight, Palantir shares were up over 11% in premarket trading. Revenues rose 70% year-on-year and 19% sequentially, easily beating expectations, while earnings per share doubled.

PayPal fell 15.6% premarket after announcing that it was changing CEO. The company announced that Alex Chriss is leaving after two and a half years, with chair Enrique Lores, former BP CEO, will switch roles to "help accelerate execution and bring greater discipline to how we implement our strategic priorities as we enter our next phase of growth".

Robotics-focused Teradyne jumped 23% on a robust first-quarter outlook released overnight.

Nvida shares are up 0.75% in premarket trading after falling yesterday on reports suggesting that its proposed $100 billion investment in OpenAI had stalled.

Meanwhile, even though the government shutdown is expected to be resolved this week, the BLS said it would not have enough time to complete all its work in time to release the non-farm payrolls report on Friday.

The BLS will still release the JOLTS job openings report this afternoon, with the separately produced ADP payrolls due tomorrow also unaffected.