On Tuesday, Nasdaq Composite fell over 2%, leading the slide. The drop came as Palantir (PLTR) stock tumbled 8% despite beating quarterly expectations, as per Yahoo Finance. Investors are worried that AI stock prices are too high and not supported by company fundamentals.
AI stock fears and weak earnings shake markets
Fears of an AI bubble are growing after investor Michael Burry placed bets (bets against) on Palantir and Nvidia. AMD’s weak guidance may add to those bubble fears. McDonald’s, Qualcomm, Robinhood, and Toyota are set to report earnings on Wednesday.
Investors are waiting for the ADP private payrolls report, which gives clues about job growth. Reports on mortgage applications and ISM services activity are also expected. The government shutdown has paused many economic reports — and by Wednesday, it became the longest shutdown in history.
Tariff case and global stock drop add pressure
The Trump administration has warned of “mass chaos” for travelers as airport closures are being discussed due to the prolonged shutdown. On Wednesday, the Supreme Court will hear a major case questioning Trump’s legal authority to impose his wide-reaching tariffs, as per the report by Yahoo Finance. The case is Learning Resources, Inc. v. Trump.
Yahoo Finance’s Ben Werschkul reported that experts are split on how the court will rule. Some say there’s only “50% to 65% odds” that the Supreme Court will agree with lower courts saying Trump lacks that authority, according to Ed Mills (Raymond James) and Henrietta Treyz (Veda Partners). ALSO READ: Palantir CEO Alex Karp calls firm ‘Anti-Woke,’ doubles down on support for ICE and IsraelPinterest (PINS) shares fell 17% before the market opened. The company said tariff pressures and weak growth opportunities have hurt its forecast. Super Micro Computer (SMCI) shares fell 9% premarket after its Q3 forecast missed Wall Street expectations. Lumentum Holdings (LITE) shares rose 15% premarket after beating Q3 earnings estimates.
Novo Nordisk (NVO, NOVO-B.CO) cut its 2025 full-year profit and sales outlook, blaming slower demand for its GLP-1 weight-loss drugs, as per the report by Reuters. The company now expects operating profit growth of 4%–7%, down from 4%–10% earlier.
CEO Mike Doustdar said it’s due to “lower growth expectations for our GLP-1 treatments.” Shares rose 3% premarket as investors reacted to the update. Novo’s stock has dropped 50% this year, as it faces tough competition from Eli Lilly and copycat drugs.
South Korea’s Kospi fell over 6%, later recovering to 3% down. Japan’s Nikkei 225 dropped 2.8%. Hong Kong’s Hang Seng slipped 0.5%. The global drop follows heavy US tech losses, with investors losing confidence in expensive AI stocks.
On X, Spencer Hakimian posted a graph saying, “BREAKING: MASSIVE GLOBAL STOCK MARKET SELLOFF. JAPAN -4%.” Roberto Rios also posted, “Nikkei has fallen 3% so far this morning in Tokyo. The Korean stock market just triggered a limit down. What is going on?!?!”.
Gold and dollar trends show market caution
Gold (GC=F) stayed near $3,937/oz, after dropping almost 2% the day before. A stronger US dollar and Fed’s rate cut talk have reduced gold’s safe-haven demand, as per the report by Bloomberg. The dollar rose for a fifth day, its best streak since July. ALSO READ: Bitcoin just crashed below a key level — analysts warn it could sink toward $94,200 next
Fed officials, including St. Louis Fed’s Alberto Musalem and Cleveland Fed’s Beth Hammack, are expected to give comments later this week. Gold is still 50% higher year-to-date, though investors have recently pulled money from gold-backed ETFs.
Traders are closely watching how US markets react to global selloffs, especially with tech stocks, tariff rulings, and economic data all hitting at once. The next few days could decide whether this is just a short-term correction or the start of a deeper market slide.
FAQs
Q1. What caused the massive global market selloff?
The global selloff happened after tech stocks like Palantir and AMD fell, raising fears of an AI bubble and weak earnings.
Q2. Will the US stock market fall after the global crash?
US stocks may face more pressure as traders react to global losses, tariff news, and fresh economic data this week.
