China Indexes Halted 2-Day Sell-Off as Bargain Hunters Stepped In

Stocks in China and Hong Kong rebounded, tracking gains in overnight trading in New York. 

The Hang Seng Index increased 1.7%, and the mainland-focused CSI 300 index advanced 1.3% as bargain hunters returned.

Technology stocks led gainers in Hong Kong, and financials dominated trading in Shanghai ahead of quarterly results and international trade data. 

Investors reviewed the U.S. Supreme Court's oral arguments in tariff cases, and justices appear skeptical about the U.S. president's authority to impose sweeping tariffs without approvals from the U.S. Congress.

The Trump administration is likely to seek other ways to impose import taxes, but those taxes will be limited in scope and targeted to certain industries. 

The tariffs case filed by seven small businesses and 12 U.S. states led by Oregon was consolidated by the U.S. Supreme Court, and the court is set to announce its decision before the end of its term in July 2026.

The Trump administration's tariffs faced significant opposition from two lower courts, and they ruled them illegal.  

China Indexes and Stocks 

The Hang Seng Index advanced 1.7% to 26,362.15, and the mainland-focused CSI 300 index increased 1.3% to 4,686.45. 

Four mainland China-based companies listed their stocks on the Hong Kong Stock Exchange. 

Ningbo Joyson Electronic decreased 3% to HK $21.35, and the automotive supplier priced its initial public offering at HK $22.0 a share and raised net proceeds of HK $3.2 billion. 

Pony.ai Inc. dropped 12% to HK $122.60, and the autonomous driving company priced its offering at HK $139.0 a share and raised net proceeds of HK $6.5 billion. 

WeRide Inc. dropped 14% to HK $23.40, and the autonomous driving company priced its initial offering at HK $27 a share and raised net proceeds of HK $2.2 billion. 

Vigonvita Life Sciences soared more than 145% to HK $85.10, and the neuropsychiatry- and reproductive health-focused company priced its initial public offering at HK $33.37 a share and raised net proceeds of HK $527.4 million. 

China Indexes Halted 2-Day Sell-Off as Bargain Hunters Stepped In

Stocks in China and Hong Kong rebounded, tracking gains in overnight trading in New York. 

The Hang Seng Index increased 1.7%, and the mainland-focused CSI 300 index advanced 1.3% as bargain hunters returned.

Technology stocks led gainers in Hong Kong, and financials dominated trading in Shanghai ahead of quarterly results and international trade data. 

Investors reviewed the U.S. Supreme Court's oral arguments in tariff cases, and justices appear skeptical about the U.S. president's authority to impose sweeping tariffs without approvals from the U.S. Congress.

The Trump administration is likely to seek other ways to impose import taxes, but those taxes will be limited in scope and targeted to certain industries. 

The tariffs case filed by seven small businesses and 12 U.S. states led by Oregon was consolidated by the U.S. Supreme Court, and the court is set to announce its decision before the end of its term in July 2026.

The Trump administration's tariffs faced significant opposition from two lower courts, and they ruled them illegal.  

China Indexes and Stocks 

The Hang Seng Index advanced 1.7% to 26,362.15, and the mainland-focused CSI 300 index increased 1.3% to 4,686.45. 

Four mainland China-based companies listed their stocks on the Hong Kong Stock Exchange. 

Ningbo Joyson Electronic decreased 3% to HK $21.35, and the automotive supplier priced its initial public offering at HK $22.0 a share and raised net proceeds of HK $3.2 billion. 

Pony.ai Inc. dropped 12% to HK $122.60, and the autonomous driving company priced its offering at HK $139.0 a share and raised net proceeds of HK $6.5 billion. 

WeRide Inc. dropped 14% to HK $23.40, and the autonomous driving company priced its initial offering at HK $27 a share and raised net proceeds of HK $2.2 billion. 

Vigonvita Life Sciences soared more than 145% to HK $85.10, and the neuropsychiatry- and reproductive health-focused company priced its initial public offering at HK $33.37 a share and raised net proceeds of HK $527.4 million. 

U.S. Movers: AMD, Pinterest, Super Micro Computer

Advanced Micro Devices declined 4.4% to $239.76 despite the company's third-quarter results surpassing market expectations. 

Revenue in the third quarter soared 36% to $9.2 billion from $6.8 billion, net income jumped 61% to $1.2 billion from $771 million, and diluted earnings per share advanced 60% to 75 cents from 47 cents a year ago. 

Data center segment revenue jumped 22% to $4.3 billion, client and gaming segment revenue surged 73% to $4.0 billion, and embedded segment revenue decreased 8% to $857 million. 

The company guided fourth-quarter revenue of $9.6 billion with a band of $300 million, representing an annual increase of 25% and a sequential rise of 4% when measured from the midpoint of the revenue range. 

AMD said that the fourth-quarter revenue estimate does not include advanced chip MI308 shipments to China because of the uncertainty surrounding the U.S. trade policy and export controls. 

The advanced chipmaker guided a non-GAAP gross margin of 54.5% in the period.

Super Micro Computer dropped 9.2% to $43.11 after the company reported weaker-than-expected earnings in the fiscal first quarter ending in September. 

Revenue in the quarter declined to $5.0 billion from $5.9 billion, net income plunged to $168 million from $424 million, and diluted earnings per share dropped to 26 cents from 67 cents a year ago. 

Moreover, the company's fiscal year 2026 revenue of $36 billion fell short of market expectations. 

The company estimated fiscal second quarter net sales between $10.0 billion and $11.0 billion, diluted net income per share between 37 cents and 45 cents, and non-GAAP earnings per share between 46 cents and 54 cents. 

Pinterest Inc. plunged 17.7% to $27.10 after the company's third-quarter results disappointed investors. 

Revenue increased 17% to $1.1 billion from $898 million, net income jumped more than threefold to $92 million from $30 million, and diluted earnings per share advanced to 13 cents from 4 cents a year ago.

The company estimated fourth-quarter revenue to range between $1.31 billion and $1.34 billion, representing an annual increase between 14% and 16%. 

The image-sharing platform estimated adjusted operating income between $533 million and $558 million in the period.  

U.S. Movers: AMD, Pinterest, Super Micro Computer

Advanced Micro Devices declined 4.4% to $239.76 despite the company's third-quarter results surpassing market expectations. 

Revenue in the third quarter soared 36% to $9.2 billion from $6.8 billion, net income jumped 61% to $1.2 billion from $771 million, and diluted earnings per share advanced 60% to 75 cents from 47 cents a year ago. 

Data center segment revenue jumped 22% to $4.3 billion, client and gaming segment revenue surged 73% to $4.0 billion, and embedded segment revenue decreased 8% to $857 million. 

The company guided fourth-quarter revenue of $9.6 billion with a band of $300 million, representing an annual increase of 25% and a sequential rise of 4% when measured from the midpoint of the revenue range. 

AMD said that the fourth-quarter revenue estimate does not include advanced chip MI308 shipments to China because of the uncertainty surrounding the U.S. trade policy and export controls. 

The advanced chipmaker guided a non-GAAP gross margin of 54.5% in the period.

Super Micro Computer dropped 9.2% to $43.11 after the company reported weaker-than-expected earnings in the fiscal first quarter ending in September. 

Revenue in the quarter declined to $5.0 billion from $5.9 billion, net income plunged to $168 million from $424 million, and diluted earnings per share dropped to 26 cents from 67 cents a year ago. 

Moreover, the company's fiscal year 2026 revenue of $36 billion fell short of market expectations. 

The company estimated fiscal second quarter net sales between $10.0 billion and $11.0 billion, diluted net income per share between 37 cents and 45 cents, and non-GAAP earnings per share between 46 cents and 54 cents. 

Pinterest Inc. plunged 17.7% to $27.10 after the company's third-quarter results disappointed investors. 

Revenue increased 17% to $1.1 billion from $898 million, net income jumped more than threefold to $92 million from $30 million, and diluted earnings per share advanced to 13 cents from 4 cents a year ago.

The company estimated fourth-quarter revenue to range between $1.31 billion and $1.34 billion, representing an annual increase between 14% and 16%. 

The image-sharing platform estimated adjusted operating income between $533 million and $558 million in the period.  

Caution Prevails Ahead of Possible Market Pullback, Supreme Court to Hear Arguments On Legality of Trump's Tariffs

Popular benchmark indexes attempted to rebound on Wednesday, and investors debated the future path of mega-cap tech stocks. 

The S&P 500 index increased 0.2%, and the tech-heavy Nasdaq Composite advanced 0.4% on Wednesday following sharp losses in the previous trading session. 

Market participants are increasingly focused on a possible drawdown of as much as 15% amid a list of growing worries, including the high valuation of AI-linked tech stocks, circular AI trade, and the uncertainty surrounding the Fed's December rate cut.  

The U.S. government's prolonged shutdown is also keeping market anxieties at elevated levels, as lawmakers show no interest in compromise in the immediate future. 

In addition, investors are worried that the US-China trade tensions could resurface if the erratic U.S. president changes his mind and imposes additional duties on Chinese goods.  

U.S. Stock Movers 

Advanced Micro Devices declined 4.4% to $239.76 despite the company's third-quarter results surpassing market expectations. 

Revenue in the third quarter soared 36% to $9.2 billion from $6.8 billion, net income jumped 61% to $1.2 billion from $771 million, and diluted earnings per share advanced 60% to 75 cents from 47 cents a year ago. 

Data center segment revenue jumped 22% to $4.3 billion, client and gaming segment revenue surged 73% to $4.0 billion, and embedded segment revenue decreased 8% to $857 million. 

The company guided fourth-quarter revenue of $9.6 billion with a band of $300 million, representing an annual increase of 25% and a sequential rise of 4% when measured from the midpoint of the revenue range. 

AMD said that the fourth-quarter revenue estimate does not include advanced chip MI308 shipments to China because of the uncertainty surrounding the U.S. trade policy and export controls. 

The advanced chipmaker guided a non-GAAP gross margin of 54.5% in the period.

Super Micro Computer Micro dropped 9.2% to $43.11 after the company reported weaker-than-expected earnings in the fiscal first quarter ending in September. 

Revenue in the quarter declined to $5.0 billion from $5.9 billion, net income plunged to $168 million from $424 million, and diluted earnings per share dropped to 26 cents from 67 cents a year ago. 

Moreover, the company's fiscal year 2026 revenue of $36 billion fell short of market expectations. 

The company estimated fiscal second quarter net sales between $10.0 billion and $11.0 billion, diluted net income per share between 37 cents and 45 cents, and non-GAAP earnings per share between 46 cents and 54 cents. 

Pinterest Inc. plunged 17.7% to $27.10 after the company's third-quarter results disappointed investors. 

Revenue increased 17% to $1.1 billion from $898 million, net income jumped more than threefold to $92 million from $30 million, and diluted earnings per share advanced to 13 cents from 4 cents a year ago.

The company estimated fourth-quarter revenue to range between $1.31 billion and $1.34 billion, representing an annual increase between 14% and 16%. 

The image-sharing platform estimated adjusted operating income between $533 million and $558 million in the period.  

Caution Prevails Ahead of Possible Market Pullback, Supreme Court to Hear Arguments On Legality of Trump's Tariffs

Popular benchmark indexes attempted to rebound on Wednesday, and investors debated the future path of mega-cap tech stocks. 

The S&P 500 index increased 0.2%, and the tech-heavy Nasdaq Composite advanced 0.4% on Wednesday following sharp losses in the previous trading session. 

Market participants are increasingly focused on a possible drawdown of as much as 15% amid a list of growing worries, including the high valuation of AI-linked tech stocks, circular AI trade, and the uncertainty surrounding the Fed's December rate cut.  

The U.S. government's prolonged shutdown is also keeping market anxieties at elevated levels, as lawmakers show no interest in compromise in the immediate future. 

In addition, investors are worried that the US-China trade tensions could resurface if the erratic U.S. president changes his mind and imposes additional duties on Chinese goods.  

U.S. Stock Movers 

Advanced Micro Devices declined 4.4% to $239.76 despite the company's third-quarter results surpassing market expectations. 

Revenue in the third quarter soared 36% to $9.2 billion from $6.8 billion, net income jumped 61% to $1.2 billion from $771 million, and diluted earnings per share advanced 60% to 75 cents from 47 cents a year ago. 

Data center segment revenue jumped 22% to $4.3 billion, client and gaming segment revenue surged 73% to $4.0 billion, and embedded segment revenue decreased 8% to $857 million. 

The company guided fourth-quarter revenue of $9.6 billion with a band of $300 million, representing an annual increase of 25% and a sequential rise of 4% when measured from the midpoint of the revenue range. 

AMD said that the fourth-quarter revenue estimate does not include advanced chip MI308 shipments to China because of the uncertainty surrounding the U.S. trade policy and export controls. 

The advanced chipmaker guided a non-GAAP gross margin of 54.5% in the period.

Super Micro Computer Micro dropped 9.2% to $43.11 after the company reported weaker-than-expected earnings in the fiscal first quarter ending in September. 

Revenue in the quarter declined to $5.0 billion from $5.9 billion, net income plunged to $168 million from $424 million, and diluted earnings per share dropped to 26 cents from 67 cents a year ago. 

Moreover, the company's fiscal year 2026 revenue of $36 billion fell short of market expectations. 

The company estimated fiscal second quarter net sales between $10.0 billion and $11.0 billion, diluted net income per share between 37 cents and 45 cents, and non-GAAP earnings per share between 46 cents and 54 cents. 

Pinterest Inc. plunged 17.7% to $27.10 after the company's third-quarter results disappointed investors. 

Revenue increased 17% to $1.1 billion from $898 million, net income jumped more than threefold to $92 million from $30 million, and diluted earnings per share advanced to 13 cents from 4 cents a year ago.

The company estimated fourth-quarter revenue to range between $1.31 billion and $1.34 billion, representing an annual increase between 14% and 16%. 

The image-sharing platform estimated adjusted operating income between $533 million and $558 million in the period.  

Sharp Sell-Off In Global AI Stocks Dragged Down Japan's Nikkei 225 by 5%

Japan's benchmark indexes plunged as much as 5% following steep losses in tech stocks in New York in overnight trading. 

The Nikkei 225 Stock Average dropped nearly 5%, and the broader Topix declined nearly 2% before recovering from the worst losses of the session. 

In overnight trading, the S&P 500 index closed down 1.1%, and the Nasdaq Composite dropped 2% amid worries about sky-high valuations of mega-cap tech stocks. 

Those worries boomeranged across Asia, and markets in Shanghai, Hong Kong, Tokyo, and Seoul dropped between 1% and 4%. 

Investors are increasingly preparing for the U.S. benchmark indexes to ease 15% from record highs, as circular AI trade lifted a select list of tech stocks from the lows in early April.  

Despite receding trade tensions between the U.S. and China, investors are concerned that relations between the two countries are likely to remain volatile. 

Moreover, Japan's new prime minister Sanae Takaichi's support of the ultra-loose monetary policy may support higher inflation for longer.

Japan is facing renewed pressure from the Trump administration to sharply increase its defense spending and lower its reliance on the U.S., as the world's largest economy investigates how to lower its global defense commitments. 

The Japanese yen weakened to 153.47 against the U.S. dollar amid expectations that the Bank of Japan is likely to leave its key short-term rates unrevised at the last policy meeting of 2025 in December. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average plunged 3% to 49,925.47, and the broader Topix fell 1.7% to 3,253.89. 

Softbank Group plunged 9.8% to ¥22,850.0, Tokyo Electron Ltd. decreased 3.8% to ¥33,460.0, and Advantest Corp. dropped 6.9% to ¥20,280.0. 

Mitsubishi UFJ Financial Group decreased 2.2% to ¥2,278.0, Sumitomo Mitsui Financial Group eased 1.8% to ¥4,077.0, and Mizuho Financial Group fell 2.2% to ¥4,990.0.

Sharp Sell-Off In Global AI Stocks Dragged Down Japan's Nikkei 225 by 5%

Japan's benchmark indexes plunged as much as 5% following steep losses in tech stocks in New York in overnight trading. 

The Nikkei 225 Stock Average dropped nearly 5%, and the broader Topix declined nearly 2% before recovering from the worst losses of the session. 

In overnight trading, the S&P 500 index closed down 1.1%, and the Nasdaq Composite dropped 2% amid worries about sky-high valuations of mega-cap tech stocks. 

Those worries boomeranged across Asia, and markets in Shanghai, Hong Kong, Tokyo, and Seoul dropped between 1% and 4%. 

Investors are increasingly preparing for the U.S. benchmark indexes to ease 15% from record highs, as circular AI trade lifted a select list of tech stocks from the lows in early April.  

Despite receding trade tensions between the U.S. and China, investors are concerned that relations between the two countries are likely to remain volatile. 

Moreover, Japan's new prime minister Sanae Takaichi's support of the ultra-loose monetary policy may support higher inflation for longer.

Japan is facing renewed pressure from the Trump administration to sharply increase its defense spending and lower its reliance on the U.S., as the world's largest economy investigates how to lower its global defense commitments. 

The Japanese yen weakened to 153.47 against the U.S. dollar amid expectations that the Bank of Japan is likely to leave its key short-term rates unrevised at the last policy meeting of 2025 in December. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average plunged 3% to 49,925.47, and the broader Topix fell 1.7% to 3,253.89. 

Softbank Group plunged 9.8% to ¥22,850.0, Tokyo Electron Ltd. decreased 3.8% to ¥33,460.0, and Advantest Corp. dropped 6.9% to ¥20,280.0. 

Mitsubishi UFJ Financial Group decreased 2.2% to ¥2,278.0, Sumitomo Mitsui Financial Group eased 1.8% to ¥4,077.0, and Mizuho Financial Group fell 2.2% to ¥4,990.0.

China and Asia Markets Track Wall Street Lower Amid AI Bubble Worries

Stocks in China and Asia fell sharply, mirroring losses in overnight trading in New York. 

The Hang Seng Index decreased 0.6%, and the mainland-focused CSI 300 index eased 0.1% amid worries about stretched valuations of mega-cap tech stocks. 

Tuesday's 2% decline in the tech-heavy Nasdaq Composite led to a 4.7% plunge in Tokyo and a 3.5% decline in Seoul, as AI-linked stocks retreated. 

In addition, market sentiment was weak in Hong Kong amid uncertainty over the U.S. Federal Reserve's rate path. 

Investors are dialing down expectations of a possible rate cut following a December policy meeting, but they are still holding out for an additional two rate cuts in the first half of 2026. 

China Indexes and Stocks

The Hang Seng Index decreased 0.6% to 25,807.73, and the CSI 300 index eased 0.1% to 4,615.21. 

Alibaba Group Holding Ltd. decreased 1.3% to $157.20, Tencent Holdings declined 0.1% to HK $629.0, and JD.com Inc. dropped 1.1% to HK $123.10. 

In Wednesday's trading in Hong Kong, BYD decreased 0.9% to HK $86.90, Xpeng Inc. fell 3.3% to HK $86.0, and Xiaomi Corp. dropped 1% to HK $43.0. 

Two companies listed their shares amid strong demand for new listings from international investors.

Seres Group decreased 3% to HK $127.60, and the electric vehicle maker listed and priced its stock on the Hong Kong Stock Exchange at HK $131.50 per share. 

The company's global offering of 100.2 million shares was 90% sold to foreign investors and raised a net proceed of HK $14.02 billion. 

Suzhou Fengbei Biotech soared more than 180% to 69.92 yuan on the first day of its trading in Shanghai. 

China and Asia Markets Track Wall Street Lower Amid AI Bubble Worries

Stocks in China and Asia fell sharply, mirroring losses in overnight trading in New York. 

The Hang Seng Index decreased 0.6%, and the mainland-focused CSI 300 index eased 0.1% amid worries about stretched valuations of mega-cap tech stocks. 

Tuesday's 2% decline in the tech-heavy Nasdaq Composite led to a 4.7% plunge in Tokyo and a 3.5% decline in Seoul, as AI-linked stocks retreated. 

In addition, market sentiment was weak in Hong Kong amid uncertainty over the U.S. Federal Reserve's rate path. 

Investors are dialing down expectations of a possible rate cut following a December policy meeting, but they are still holding out for an additional two rate cuts in the first half of 2026. 

China Indexes and Stocks

The Hang Seng Index decreased 0.6% to 25,807.73, and the CSI 300 index eased 0.1% to 4,615.21. 

Alibaba Group Holding Ltd. decreased 1.3% to $157.20, Tencent Holdings declined 0.1% to HK $629.0, and JD.com Inc. dropped 1.1% to HK $123.10. 

In Wednesday's trading in Hong Kong, BYD decreased 0.9% to HK $86.90, Xpeng Inc. fell 3.3% to HK $86.0, and Xiaomi Corp. dropped 1% to HK $43.0. 

Two companies listed their shares amid strong demand for new listings from international investors.

Seres Group decreased 3% to HK $127.60, and the electric vehicle maker listed and priced its stock on the Hong Kong Stock Exchange at HK $131.50 per share. 

The company's global offering of 100.2 million shares was 90% sold to foreign investors and raised a net proceed of HK $14.02 billion. 

Suzhou Fengbei Biotech soared more than 180% to 69.92 yuan on the first day of its trading in Shanghai. 

U.S. Movers: Clorox, Palantir

Palantir Technologies dropped 7% to $192.80, and the company reported better-than-expected third-quarter results and fourth-quarter guidance. 

Revenue increased 63% to $1.2 billion from $725.5 million, net income advanced more than threefold to $476.7 million from $149.3 million, and diluted earnings per share rose to 18 cents from 6 cents a year ago.  

For the fourth quarter, the company guided revenue between $1.327 billion and $1.331 billion, and adjusted income from operations between $695 million and $699 million. 

Clorox Company increased 1.7% to $111.0, and the cleaning products maker reported better-than-expected fiscal first-quarter results. 

Net sales decreased 19% to $1.4 billion from $1.7 billion, net income declined 20% to $80 million from $99 million, and diluted earnings per share fell 19% to 65 cents from 80 cents a year ago. 

Adjusted earnings per share dropped 54% to 85 cents from $1.86 a year ago, primarily due to lower net sales related to its ERP transition.

U.S. Movers: Clorox, Palantir

Palantir Technologies dropped 7% to $192.80, and the company reported better-than-expected third-quarter results and fourth-quarter guidance. 

Revenue increased 63% to $1.2 billion from $725.5 million, net income advanced more than threefold to $476.7 million from $149.3 million, and diluted earnings per share rose to 18 cents from 6 cents a year ago.  

For the fourth quarter, the company guided revenue between $1.327 billion and $1.331 billion, and adjusted income from operations between $695 million and $699 million. 

Clorox Company increased 1.7% to $111.0, and the cleaning products maker reported better-than-expected fiscal first-quarter results. 

Net sales decreased 19% to $1.4 billion from $1.7 billion, net income declined 20% to $80 million from $99 million, and diluted earnings per share fell 19% to 65 cents from 80 cents a year ago. 

Adjusted earnings per share dropped 54% to 85 cents from $1.86 a year ago, primarily due to lower net sales related to its ERP transition.

U.S. Stocks Retreat from Record Highs as AI Trade Cools

Wall Street indexes struggled to rise above the flatline amid worries about a market rally concentrated in a few mega-cap stocks. 

The S&P 500 index decreased 0.2%, and the tech-heavy Nasdaq Composite dropped 0.4% as investors debated the possible market correction. 

Benchmark indexes have rebounded more than 37% from their lows in early April; however, those gains are powered by AI enthusiasm and earnings results surpassing market expectations. 

Moreover, the Federal Reserve's two rate cuts in 2025 have supported market enthusiasm, and investors are looking for one additional rate cut this year followed by two more in the first half of 2026. 

The U.S. federal government shutdown shows no signs of ending, and the data blackout has lowered visibility into the inner workings of the U.S. economy. 

Investors are hoping that the labor market's conditions will improve and the jobless rate and churn will stabilize in the months ahead. 

U.S. Stock Movers 

Palantir Technologies dropped 7% to $192.80, and the company reported better-than-expected third-quarter results and fourth-quarter guidance. 

Revenue increased 63% to $1.2 billion from $725.5 million, net income advanced more than threefold to $476.7 million from $149.3 million, and diluted earnings per share rose to 18 cents from 6 cents a year ago.  

For the fourth quarter, the company guided revenue between $1.327 billion and $1.331 billion, and adjusted income from operations between $695 million and $699 million. 

Clorox Company increased 1.7% to $111.0, and the cleaning products maker reported better-than-expected fiscal first-quarter results. 

Net sales decreased 19% to $1.4 billion from $1.7 billion, net income declined 20% to $80 million from $99 million, and diluted earnings per share fell 19% to 65 cents from 80 cents a year ago. 

Adjusted earnings per share dropped 54% to 85 cents from $1.86 a year ago, primarily due to lower net sales related to its ERP transition.

U.S. Stocks Retreat from Record Highs as AI Trade Cools

Wall Street indexes struggled to rise above the flatline amid worries about a market rally concentrated in a few mega-cap stocks. 

The S&P 500 index decreased 0.2%, and the tech-heavy Nasdaq Composite dropped 0.4% as investors debated the possible market correction. 

Benchmark indexes have rebounded more than 37% from their lows in early April; however, those gains are powered by AI enthusiasm and earnings results surpassing market expectations. 

Moreover, the Federal Reserve's two rate cuts in 2025 have supported market enthusiasm, and investors are looking for one additional rate cut this year followed by two more in the first half of 2026. 

The U.S. federal government shutdown shows no signs of ending, and the data blackout has lowered visibility into the inner workings of the U.S. economy. 

Investors are hoping that the labor market's conditions will improve and the jobless rate and churn will stabilize in the months ahead. 

U.S. Stock Movers 

Palantir Technologies dropped 7% to $192.80, and the company reported better-than-expected third-quarter results and fourth-quarter guidance. 

Revenue increased 63% to $1.2 billion from $725.5 million, net income advanced more than threefold to $476.7 million from $149.3 million, and diluted earnings per share rose to 18 cents from 6 cents a year ago.  

For the fourth quarter, the company guided revenue between $1.327 billion and $1.331 billion, and adjusted income from operations between $695 million and $699 million. 

Clorox Company increased 1.7% to $111.0, and the cleaning products maker reported better-than-expected fiscal first-quarter results. 

Net sales decreased 19% to $1.4 billion from $1.7 billion, net income declined 20% to $80 million from $99 million, and diluted earnings per share fell 19% to 65 cents from 80 cents a year ago. 

Adjusted earnings per share dropped 54% to 85 cents from $1.86 a year ago, primarily due to lower net sales related to its ERP transition.

Renewed Interest In AI Stocks Lifted Hong Kong Indexes

China's tech stocks rebounded on Tuesday, mirroring renewed vigor in AI-linked stocks in New York.

The Hang Seng index gained 0.2%, and the mainland-focused CSI 300 index decreased 0.4% as investors awaited the release of key earnings later this week.

AI-related stocks advanced in China and Hong Kong following two large deals in the U.S., providing another leg of support to high-flying stocks in Hong Kong. 

OpenAI struck a multi-year $38 billion data center "partnership" deal with Amazon.com and gained access to the computing power of servers using Nvidia's advanced AI chips. 

Microsoft struck a $9.7 billion cloud computing deal with Australia-based IREN Ltd.

The five-year deal grants Microsoft access to NVIDIA's high-performance graphic processor GB300, hosted at the company's 750 MW campus in Texas. 

China Indexes and Stocks

The Hang Seng Index increased 0.2% to 26,209.39, and the mainland-focused CSI 300 index fell 0.4% to 4,634.57. 

Baidu Inc. jumped 6.5% to $126.20, Alibaba Group decreased 0.7% to HK $162.10, Meituan fell 1% to HK $101.30, Tencent Holdings gained 1.7% to HK $638.50, and SMIC advanced 1.4% to HK $73.85.