Source: Sharecast
As of 1230 GMT, Dow Jones futures were down 0.70%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.99% and 1.28% weaker, respectively.
The Dow closed 226.19 points lower on Monday as stocks continued to trade within a narrow range – though news of major tech contract wins and M&A headlines still managed to keep investors busy during the session.
Palantir traded lower in pre-market action despite the software company's Wall Street-beating third-quarter earnings overnight, as investors looked to be growing increasingly concerned about valuations in the bull market-leading sector.
Palantir, which was up 173% year-to-date as of Monday's close, trades at more than 200 times forward earnings and carried a current price-to-earnings ratio approaching 700 heading into Tuesday's session, with the elevated multiples leaving investors to expect to see continued upgrades to profit and revenue guidance to justify further upside. Oracle, AMD and other AI-exposed names, like Nvidia and Amazon, were all in the red prior to the open.
Elsewhere, Shopify guided to strong fourth-quarter revenue growth on Tuesday, signaling resilient demand at the e-commerce company, and also reported total third-quarter revenues of $2.84bn, ahead of estimates of $2.76bn.
Uber traded lower in pre-market after the ridesharing giant's soft underlying earnings guidance overshadowered its solid third-quarter earnings beat, while Pfizer narrowed its full-year earnings guidance after topping quarterly expectatiions, and KFC owner Yum! Brands said quarterly revenues had grown by 8% - slightly more than expected.
Still to come, AMD and Live Nation were scheduled to released their latest quarterly earnings reports after the close.
Investor sentiment also remained cautious as macro risks continued to weigh on market momentum, including a record-tying US government shutdown and uncertainty over the Federal Reserve's next move.
The shutdown, now in its 35th day, has tied the longest in US history and delayed several key economic data releases, adding to market unease. Attention was also turning to the Fed's December meeting, with investors watching closely for signs of a third consecutive rate cut.
Expectations for lower interest rates have been central to supporting elevated equity valuations and offsetting signs of a slowing economy and softening labour market - any deviation from that path could prompt a reassessment of risk across sectors.
No major data points were scheduled for release on Tuesday.
Reporting by Iain Gilbert at Sharecast.com
