Dow futures plunged over 450 points or 0.76% on Tuesday as traders weighed mixed earnings and questioned whether AI stocks can offset ongoing market concerns.
While technology stocks, particularly in the AI sector, have driven gains recently, the Dow’s futures movement suggests profit-taking and some risk aversion ahead of a key earnings week.
Overall, the market appeared to strike a balance between optimism about growth and caution regarding valuations and upcoming economic data releases.
5 things to know before Wall Street opens
1. The longest US government shutdown entered its 35th day on Tuesday.
However, for the first time, signs of progress emerged as Senate Republicans and Democrats discussed a potential “off-ramp” to end the stalemate.
The shutdown has disrupted federal programs, furloughed thousands of workers, and caused widespread delays, particularly in air travel due to shortages of air traffic controllers.
Food stamp benefits for low-income families have run out or are only partially funded, adding to the hardship.
2. Palantir’s stock was on a bit of a roller coaster after its Q3 2025 earnings came out.
The company actually beat expectations, reporting $1.18 billion in revenue, up a huge 63% from last year, thanks largely to strong demand for its AI platform.
The US commercial business was especially impressive, growing 121%.
The stock initially jumped about 4% on the news, but then dropped roughly 4% shortly after.
So, what’s going on? Even with the upbeat results and raised full-year guidance, investors seem a little uneasy.
Palantir is still trading at a pretty high valuation, and there’s some uncertainty hanging over the market because of the ongoing US government shutdown.
3. Stocks tied to the biggest AI players led Monday’s gains, with Amazon’s shares hitting a record closing high after announcing a $38 billion deal with OpenAI.
This new multi-year partnership means Amazon Web Services will handle a big chunk of OpenAI’s AI computing needs, which is adding to the growing confidence around the future of AI infrastructure.
The Nasdaq was up almost 0.5%, helped in part by strong gains from Amazon and Nvidia, a sign that the market’s ongoing enthusiasm for AI continues to push tech stocks higher.
4. Bitcoin slipped below a key support level around $106,000, which has some traders worried it could slide further, maybe toward $100,000, or even down to the $85,000 range, where there’s historically been stronger buying support.
The move comes at a time when investors are also getting a bit uneasy about how overheated the “Magnificent 7” tech stocks have become.
Their put-call skew just flipped, which has often been a sign in the past that markets might be near a short-term peak or due for a pullback.
5. Asian markets struggled as profit-taking followed recent record highs, with Japan’s Nikkei falling around 1.74% and South Korea’s Kospi dropping about 2.37%.
Australia’s S&P/ASX 200 also declined 0.91% ahead of a crucial central bank meeting.
In Europe, stocks reversed early optimism and closed lower, with Germany’s DAX down 1.38%, France’s CAC 40 down 1.29%, and the FTSE 100 in the UK slipping 0.85%.
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