U.S. stocks closed sharply lower on Tuesday as big banks warned that equity markets could be headed for a drawdown, reflecting mounting concerns over stretched valuations.
Market Snapshot
The Dow Jones Industrial Average fell 251.44 points, or 0.53%, to 47,085.24, the S&P 500 lost 80.42 points, or 1.17%, to 6,771.55 and the Nasdaq Composite lost 486.09 points, or 2.04%, to 23,348.64.
Market Movers
AMD — The semiconductor stock dropped 4% after Amazon said in a securities filing that it dissolved its stake in AMD in the third quarter. Otherwise, the company reported third-quarter earnings that topped expectations, with adjusted earnings of $1.20 per share on revenue of $9.25 billion. Analysts surveyed by LSEG had expected per-share earnings of $1.16 on revenue of $8.74 billion.
Pinterest — The image sharing platform plunged 18% after Pinterest reported disappointing third-quarter results, with adjusted earnings of 38 cents per share on revenue of $1.05 billion. Analysts polled by LSEG had expected per-share earnings of 42 cents on revenue of $1.05 billion.
SUPER MICRO COMPUTER INC — The AI stock tumbled 10% after Super Micro missed expectations for its first quarter and offered a disappointing earnings forecast. The server and computer infrastructure company reported adjusted earnings of 35 cents on revenue of $5.02 billion. Analysts polled by LSEG had expected per-share earnings of 40 cents on revenue of $6.0 billion. For the second quarter, the company expects to earn between 46 cents and 54 cents per share, on an adjusted basis. That’s shy of the consensus estimate of 61 cents per share.
Lending company Upstart Holdings, Inc. expects its growth to slow going forward - and by more than Wall Street was expecting. Shares of the financial-technology company, which uses AI to inform lending decisions, were off 16% in Tuesday's extended trading following downbeat guidance for the December quarter. Upstart's (UPST) management is targeting $288 million in revenue, up 32% from a year before, while the FactSet consensus was for $304 billion.
Hinge Health — Shares of the company offering virtual physical therapy services dropped 5% even after posting third-quarter revenue of $154 million, which topped the $142 million consensus estimate from LSEG.
Amgen — The biotech stock rose 2% after Amgen reported third-quarter earnings of $5.64 per share, on an adjusted basis, on revenue of $9.56 billion. That topped the estimate of $5.01 per share in earnings on revenue of $8.97 billion expected by analysts polled by LSEG.
Rivian Automotive — Shares of the electric vehicle maker rose 4% after it reported better-than-expected third-quarter results. Rivian posted an adjusted loss of 65 cents per share on revenue of $1.56 billion. According to LSEG, analysts had anticipated a loss of 72 cents per share on $1.5 billion.
Toast, Inc. — Shares of the restaurant technology platform rose more than 7% after it said it earned 16 cents in the third quarter on revenue of $1.63 billion. The company now expects adjusted EBITDA to be in the range of $610 million to $620 million, up from a prior forecast of $565 million to $585 million.
Astera Labs — The maker of semiconductor-based connectivity solutions for cloud and AI infrastructure fell 8% despite reporting a third quarter that was better than expected. Astera Labs earned 49 cents per share, excluding items, exceeding the FactSet consensus estimate of 39 cents per share. Revenue of $230.6 million topped the anticipated $206.5 million.
CAVA Group Inc. — Shares of the Mediterranean restaurant chain fell more than 8% after it missed revenue estimates for the third quarter and cut its annual same-store sale forecast for the second time this year. The company said it expects full year sales at stores open at least a year to rise between 3% to 4%, down from its prior estimate of 4% to 6% growth.
Arista Networks — Shares plunged 10% after Arista Networks issued lackluster current quarter guidance, even as third-quarter results came in above expectations. The network equipment maker forecasts fourth quarter revenue of $2.3 billion to $2.4 billion, with the lower end missing the $2.33 billion estimate, according to LSEG.
Live Nation Entertainment — Entertainment Shares pulled back more than 5% after the entertainment company’s third-quarter revenue missed analyst expectations, posting $8.50 billion compared to the $8.61 billion that analysts polled by StreetAccount had estimated. The company’s adjusted operating income also came in line with expectations at $1.03 billion.
Axon Enterprise — The manufacturing stock plummeted about 21% following its weaker-than-expected third-quarter earnings. The company posted adjusted earnings of $1.17 per share, below the $1.52 per share that analysts polled by FactSet were anticipating. Revenue for the period came in better than expected, however, at $711 million versus the consensus estimate of $704.8 million.
Palantir Technologies declined 8% even after the data-analytics company reported third-quarter earnings that beat analysts' estimates and boosted its fiscal-year guidance. The stock's hyperinflated valuation concerns some on Wall Street.
$Sarepta Therapeutics(SRPT)$ plummeted 34% after the biotechnology company disclosed disappointing drug-trial data for treatments for Duchenne muscular dystrophy. The data overshadowed a narrower-than-expected third-quarter loss.
Pfizer fell 1.5%. The drugmaker reported third-quarter adjusted earnings that were better than expected and raised its full-year guidance, but falling demand for its Covid-19 products dented revenue. Also lower than expected was revenue for two cancer drugs added to Pfizer's portfolio through its 2023 acquisition of Seagen.
Metsera Inc. surged 21%. The anti-obesity biotech said Novo Nordisk's new bid for the company was "superior" to a revised offer from Pfizer. Novo Nordisk declined 1.8%.
Uber Technologies fell 5.1%, despite the ride-hailing company's third-quarter earnings beat. Revenue totaled $13.5 billion, up 19% on a constant currency basis from a year earlier and above Wall Street's call for $13.3 billion. Income from operations came to $1.1 billion, lower than the $1.6 billion. analysts had forecast.
Tesla declined 5.2% after Norway's sovereign-wealth fund rejected Tesla CEO Elon Musk's new $1 trillion pay package.
The Trump administration is not planning to allow NVIDIA to sell its most advanced AI chip, known as the Blackwell, to China right now, the White House said on Tuesday. Nvidia shares dropped 4% on Tuesday.
Shopify tumbled 6.9%. The e-commerce company reported third-quarter revenue and gross merchandise volume, a metric heavily watched by analysts, that topped expectations. However, operating income came in below estimates, and transaction and loan losses more than doubled to $148 million from $58 million last year.
Spotify Technology fell 2.3%. Third-quarter earnings and user growth beat Wall Street expectations. Spotify increased its monthly active users by 11% to 713 million, topping the company's prior guidance of 710 million. Premium subscribers rose by 12% to 281 million, in line with expectations.
Norwegian Cruise Line Holdings sank 15%. The cruise operator posted better-than-expected adjusted third-quarter earnings, but revenue missed expectations. Norwegian also cut its full-year net yield outlook, which it described as "the most relevant measure of our pricing performance."
Zoetis fell 14% after the animal healthcare company reported weaker-than-expected quarterly revenue and slashed its full-year outlook. Companion animal products -- those meant for dogs, cats, and horses -- rose 3% from a year earlier, but livestock revenue dropped 4%.
Hertz Global soared 36% on strong third-quarter earnings as the rental car company returned to profitability for the first time in two years.
Sanmina jumped 17% after the manufacturing services provider issued earnings and revenue guidance for its current fiscal first quarter that beat analysts' estimates.
Market News
Wall Street heavyweights flag risk of pullback in equity markets
CEOs of Wall Street heavyweights Morgan Stanley MS.N and Goldman Sachs GS.N on Tuesday cautioned that equity markets could be heading toward a drawdown, underscoring growing concerns over sky-high valuations.
Fears of a market bubble come as the benchmark S&P 500 .SPX continues its meteoric climb, repeatedly hitting record highs and evoking memories of the dot-com boom.
UPS plane crashes in Kentucky, injuries reported
A UPS plane crashed in Louisville, Kentucky shortly after takeoff en route to Honolulu, the Federal Aviation Administration said on Tuesday, while local police said injuries were reported.
"UPS Flight 2976 crashed around 5:15 p.m. local time on Tuesday, Nov. 4, after departing from Louisville Muhammad Ali International Airport in Kentucky," the FAA said in a statement.
