Wall Street Takes Breather After Monday's Rally
US stock markets displayed mixed signals on Tuesday as investors paused following Monday's sharp recovery that had ended a week-long losing streak. The cooling-off period saw major indices trading in different directions, reflecting cautious investor sentiment amid ongoing concerns about artificial intelligence stock valuations.
The S&P 500 index declined by 0.2% during early trading sessions, while the Dow Jones Industrial Average managed to gain 73 points. Meanwhile, the technology-focused Nasdaq Composite fell by 0.5%, indicating particular pressure on tech stocks that had driven much of the recent market gains.
Nvidia and SoftBank Face Investor Pressure
The artificial intelligence sector faced headwinds as Nvidia shares dropped 2% following revelations that Japan's SoftBank Group had liquidated its entire stake in the AI chipmaker. SoftBank sold its Nvidia holdings last month for a substantial $5.83 billion, creating downward pressure on the stock that had surged nearly 6% just a day earlier.
The sell-off affected both companies, with SoftBank shares also declining 2% in Tokyo trading. This development came as analysts expressed concerns that AI-driven valuations might have extended beyond reasonable levels, drawing comparisons to the early 2000s dot-com bubble that famously burst with significant market consequences.
Ipek Ozkardeskaya, senior analyst at Swissquote, captured the market mood perfectly: "Sentiment is everything. If investors are in a good mood, they interpret the news positively; if not, they turn cautious quickly." This fragility in investor psychology has become increasingly apparent in recent trading sessions.
Global Markets Show Mixed Performance
While Wall Street experienced turbulence, global markets presented a varied picture. European indices generally performed well, with France's CAC 40 gaining 0.8% and the UK's FTSE 100 rising 0.7%. Germany's DAX added a more modest 0.1% during the trading day.
Asian markets ended with mixed results, reflecting the uncertain global sentiment. Japan's Nikkei slipped 0.1%, while Hong Kong's Hang Seng managed a 0.2% gain. India's Sensex showed positive momentum, climbing 0.4% as domestic investors maintained confidence despite international uncertainties.
In corporate developments, Paramount Skydance gained 4.2% in after-hours trading after announcing an increased cost-cutting target for 2026. The company now aims to achieve $3 billion in savings, even as it missed profit and revenue estimates in its latest reporting period.
Commodity markets saw Brent crude oil rise by 43 cents to $64.49 per barrel, while US benchmark oil added 35 cents to reach $60.38. The US bond market remained closed for Veterans Day, limiting trading activity in fixed-income securities.
Despite the day's mixed performance, all three major US indexes remained close to their record highs, suggesting underlying market strength. Investors continue to monitor progress on ending the US government shutdown while speculating about potential Federal Reserve interest rate cuts in the near future.
