Apple and Palantir shares slide in premarket trading following post-bell earnings
The iPhone-maker and software giant fell after earnings failed to impress investors.
US stock index futures exhibited mixed performance on Tuesday as investors awaited the outcomes of the upcoming midterm elections. Crude oil prices edged higher, while anticipation surrounding the election results weighed on market sentiment. Apple, a prominent player in the tech sector, experienced a decline of 4.5% in premarket trading following a warning about escalating memory chip costs, which could impact its holiday quarter gross margins.
Palantir Technologies, an AI-powered analytics software provider, revised upward its revenue predictions for the remainder of the year, but its shares still saw a 6.3% decrease. The Nasdaq-100 index experienced a more than 10% decline from its record high on Monday, signaling the onset of a correction phase for tech-heavy stocks.
Concerns about Big Tech's escalating AI investments and a lack of clear return prospects have fueled market uncertainty. Other tech companies have recently turned to the bond market to finance substantial AI expenditures, raising concerns about potential challenges in justifying debt-funded spending amidst rising borrowing costs.
Despite the tech sector's struggles, gains in chip stocks, including Nvidia, compensated for some losses. Nvidia experienced a 1.6% increase, while AMD rose 2.8%. Marvell Technology and Intel also witnessed positive movement. As American voters prepare to cast their ballots on the midterm elections, polls and nonpartisan analysts predict a Democratic victory in the House, while the Senate's control remains uncertain.
Market volatility has been heightened by ongoing debates surrounding government spending, deficits, and potential fiscal expansions. Morgan Stanley analysts believe the elections may help alleviate a major market overhang. Meanwhile, crude oil prices rose following a statement by an Iranian official indicating that a deal to end the war was distant, coupled with the U.S. striking Iran's Qeshm Island.
The earnings season continued unabated, with companies such as Pfizer, Archer-Daniels-Midland, Marathon Petroleum, Aehr Test Systems, and Harmonic delivering earnings reports before the market opened.
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