Traders at the New York Stock Exchange observed a mixed market movement on Monday evening, with stock futures showing a slight decline following a day that saw both the S&P 500 and the Nasdaq Composite register gains. Futures linked to the Dow Jones Industrial Average declined by 94 points, equating to a decrease of 0.2%. The S&P futures fell by 0.26%, while Nasdaq 100 futures recorded a drop of 0.4%.
In after-hours trading, shares of Palantir displayed significant volatility. The software company not only surpassed Wall Street’s third-quarter estimates but also provided an optimistic outlook, largely driven by robust growth in its artificial intelligence (AI) sector. Initially, Palantir’s shares surged by up to 4%, but they later reversed course, dropping approximately 4%.
The day’s upward momentum was notably fueled by stocks associated with leading AI companies. Amazon, having recently secured a partnership with OpenAI, saw its stock reach an all-time closing high. The tech-heavy Nasdaq Composite ultimately closed nearly 0.5% higher, while the S&P 500 saw a boost of about 0.2%. Conversely, the Dow Jones Industrial Average slipped around 226 points, or 0.5%, as more than 300 stocks within the index finished the day on a downward note. This influx of red numbers has heightened concerns regarding the market’s narrowing breadth and the significant concentration of tech stocks. Notably, fewer S&P 500 companies posted gains last month compared to those that experienced declines.
Market analysts have pointed out that robust third-quarter outcomes and increased AI spending plans from major tech firms, often referred to as hyperscalers, are continuing to bolster the ongoing bull market. However, the performance among the “Magnificent Seven,” a group of leading technology stocks, has shown signs of divergence. So far, over 300 S&P 500 companies have reported their quarterly results, with more than 80% surpassing forecasts, according to data from FactSet.
Tony Pasquariello, Goldman Sachs’ global head of hedge fund coverage, expressed skepticism about the narrative of an overlooked and underappreciated market rally. During an appearance on CNBC’s “Closing Bell,” he advised investors to remain aligned with the strengths of mega-cap tech stocks, citing potential catalysts including forthcoming interest rate cuts from the Federal Reserve and robust capital expenditure plans that could continue to drive market gains. However, Pasquariello also cautioned that the current risk-reward balance might not be as favorable as it was three or six months earlier.
