Item 1 of 2 Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 29, 2025. REUTERS/Brendan McDermid
Wall Street indexes touched all-time highs last week and notched solid gains for October as quarterly reports from Big Tech companies signaled surging AI investments, which has been powering a bull run in U.S. equities this year.
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However, doubts over the circular nature of the spending and monetization of the technology have resurfaced, spurring investors to pull back after a breakneck rally in AI-related stocks.
“It just feels like there’s been so much talk that the market is overbought and there’s a lot of overvalued stuff there that’s concentrated in tech,” said David Morrison, senior market analyst at Trade Nation.
Third-quarter earnings have been resilient so far, with more than 83% companies of the S&P 500 companies that have reported as of Saturday, beating analyst expectations compared to a long-term average of 67.2%, according to LSEG data.
At 07:18 a.m. ET, Dow E-minis were down 331 points, or 0.70%, S&P 500 E-minis were down 72 points, or 1.05% and Nasdaq 100 E-minis were down 354.5 points, or 1.36%.
DATA DARKNESS DIMMING DECEMBER HOPES
With the U.S. government shutdown likely to become the longest ever, private data has found renewed importance for investors and the Fed alike, with eyes trained on Wednesday’s ADP National Employment numbers.
Recent conflicting commentary from Fed officials has indicated differing perspectives on how to handle the data gap.
Traders are now pricing in a 72% chance of a 25-basis-point rate cut in December, lower than 90% a week earlier, according to CME Group’s FedWatch tool.
Reporting by Twesha Dikshit, Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Pooja Desai and Arun Koyyur
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