Market Recap
US stocks fell sharply on Tuesday, led by a broad selloff in tech shares, as AI valuation concerns reignited fears of a bubble. The Nasdaq plunged more than 2%, weighed down by steep losses in Nvidia and Palantir, after reports revealed that “Big Short” investor Michael Burry had placed major short positions against AI leaders.
Adding to investor anxiety, Goldman Sachs and Morgan Stanley CEOs warned of a possible market correction, while the US government shutdown extended into its 35th day, tying the longest in history.
AI Sector Pressure Builds
According to SEC filings, Scion Asset Management, led by Michael Burry, made significant bets against Nvidia and Palantir. The move came just as both stocks reached record highs amid the AI frenzy.
Palantir fell nearly 8%, despite reporting strong earnings and raising its revenue forecast, with Q3 sales jumping 63% year-over-year. However, investors viewed the company’s lofty valuation as unsustainable, leading to sharp profit-taking across AI-related stocks.
Broader market sentiment was further dampened by uncertainty over whether the Fed will deliver a third consecutive rate cut in December. While lower rates typically support growth stocks, Powell’s recent caution has tempered such expectations.
US Markets
Tech stocks dragged major indices lower:
- Nvidia fell 3.96%, Tesla sank 5.15%, and Palantir dropped nearly 8%.
- Apple managed a 0.37% gain, while Microsoft slipped 0.52% and Google-C lost 2.13%.
- Defensive plays like Berkshire Hathaway (+2.66%) and Eli Lilly (+1.15%) helped limit overall losses.
Chinese ADRs mirrored Wall Street weakness, with the Nasdaq Golden Dragon China Index down 2.05%. Alibaba fell 2.02%, JD.com lost 2.93%, and Bilibili slid 5%, while Baidu bucked the trend with a 3.1% gain.
Market Snapshot:
- Dow Jones: -251.44 pts (-0.53%) → 47,085.24
- Nasdaq: -486.09 pts (-2.04%) → 23,348.64
- S&P 500: -80.34 pts (-1.17%) → 6,771.63
Hong Kong
Hong Kong stocks fell alongside global markets. The Hang Seng Index lost 0.28%, while the Hang Seng Tech Index slipped 0.8%.
AI-linked and gaming names such as Bilibili and Xiaomi declined, while Meituan rose over 1%.
Airline stocks advanced, led by China Eastern Airlines (+3%), after quarterly earnings showed improved profitability. Gold miners rebounded modestly, with China Gold International (+2%), as UBS forecast gold could reach $4,200/oz next year, and potentially $5,000/oz under favorable policy conditions.
Market Snapshot:
- HSI: -0.28% → 25,878.85
- HSTECH: -0.80% → 5,771.54
- HSCEI: -0.31% → 9,144.41
A50
Mainland Chinese equities were mixed in early trade. The Shanghai Composite edged up 0.05%, while the Shenzhen Component slipped 0.15%. The ChiNext Index added 0.17% as turnover across the Shanghai–Shenzhen–Beijing exchanges totaled ¥1.15 trillion, marking a decline from the prior session.
Gains were concentrated in travel, consumer, and aviation sectors, while semiconductors and gaming lagged.
Market Snapshot:
- Shanghai Composite: +0.05% → 3,962.04
- Shenzhen Component: -0.15% → 13,155.62
- ChiNext: +0.17% → 3,139.53
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