Tech weakness weighed heavily on markets. CoreWeave shares plunged 11% after its earnings guidance disappointed investors, adding pressure on the broader AI sector. Nvidia, a major player in AI chips, fell 2% after SoftBank sold its entire stake in the company for $5.83 billion.
The Technology Select Sector SPDR Fund (XLK), which tracks S&P 500 tech stocks, lost nearly 1% as traders reassessed valuations in the overheated AI space.
Fresh economic data added to the cautious mood. The ADP report showed private sector job creation declined by more than 11,000 per week for the four weeks ending October 25, hinting at a possible slowdown in the US labor market. The report contrasts with earlier October gains and points to weaker hiring momentum heading into the year’s final quarter.
Markets had rallied on Monday after optimism grew that the record US government shutdown might end soon. The Senate passed a bill late Monday to reopen the government, sending it to the House for approval. The deal funds the government through January, reverses all shutdown-related layoffs, and ensures federal workers receive back pay.
The agreement does not include the Democrats’ demand to extend Affordable Care Act subsidies but promises a December vote on tax credits. Analysts said ending the shutdown would remove a key economic risk and restore the flow of federal data critical for the Federal Reserve’s December meeting. “The end to the shutdown takes another risk off the table for markets and the economy,” said Sonu Varghese, global macro strategist at Carson Group. “It will help because we’ll start getting macroeconomic data once again, and the Fed won’t go into their December meeting flying blind.” Earlier in the day, China made headlines after reports that Beijing plans to exclude US military-linked firms from rare earth exports, according to the Wall Street Journal. The proposed “validated-end user” system would allow rare earth shipments to the US while blocking access for defense-related companies — a move that could affect automakers and aerospace firms with dual civilian and military clients.
The report comes weeks after Presidents Donald Trump and Xi Jinping reached a trade truce, in which the US agreed to ease tariffs in exchange for China lifting export restrictions on rare earths — materials vital to defense and tech manufacturing.
Meanwhile, SoftBank’s sale of its Nvidia holdings underscored a shift in the Japanese investment giant’s strategy. The firm said it sold 32.1 million Nvidia shares in October, alongside part of its T-Mobile stake for $9.17 billion, as part of an “asset monetization” plan to strengthen financial flexibility and increase exposure to OpenAI-related investments.
Elsewhere, Paramount Skydance jumped 5.7% after strong earnings and plans to cut costs and raise streaming prices next year. Rigetti Computing dropped 5% after reporting $1.9 million in revenue, below analyst expectations of $2.2 million.
The broader picture suggests Wall Street remains divided — with investors rewarding megacaps for higher AI spending but punishing smaller tech names like DoorDash, Duolingo, and Roblox, whose profitability concerns have triggered double-digit losses.
Why did the US stock market fall today?
The S&P 500 slipped 0.3% on Tuesday, retreating after Monday’s rally. The Nasdaq Composite dropped 0.6%, pressured by weakness in tech shares. The Dow Jones Industrial Average managed a modest 85-point gain, up 0.2%, as investors rotated into value stocks.
Market sentiment cooled after AI-linked stocks lost ground. CoreWeave shares plunged 11% following disappointing guidance that rattled confidence in the sector. Nvidia, a key AI bellwether, fell 2% after SoftBank confirmed the sale of its entire $5.83 billion stake in the chipmaker.
The Technology Select Sector SPDR Fund (XLK), which tracks S&P 500 tech names, dropped nearly 1%, reflecting investor caution after several high-growth tech earnings missed expectations.
The AI trade, which fueled much of 2025’s market rally, has started to show cracks. Investors are growing wary of overvalued tech firms and rising capital spending.
Companies like DoorDash, Duolingo, and Roblox all saw double-digit declines last week after signaling heavier investment in AI infrastructure. Analysts warn that smaller players face tougher scrutiny compared to trillion-dollar giants like Microsoft, Alphabet, and Amazon, whose balance sheets can absorb large spending cycles.
“Investors don’t like investment cycles,” said Mark Mahaney of Evercore ISI, noting that firms prioritizing spending over profits often face short-term market punishment.
Fresh data from ADP added to the market’s cautious tone. The firm’s latest tracker showed that private employers cut an average of 11,250 jobs over the past four weeks, signaling a slowdown in hiring.
Chief Economist Nela Richardson said the data indicates the labor market “struggled to produce jobs consistently” through late October. This contrasts with ADP’s earlier report of 42,000 job gains, reflecting softening conditions as the economy digests higher rates and slower growth.
Economists had expected a 60,000-job decline in October’s official Bureau of Labor Statistics report, which remains delayed due to the government shutdown.
Did the Senate finally pass a bill to end the US government shutdown?
Yes. The U.S. Senate voted 60–40 late Monday to pass a bill reopening the government. The legislation funds operations through January 2026 and ensures all federal workers receive back pay.
The deal, which now moves to the House, ends weeks of uncertainty that had threatened to weigh on economic growth. It omits Democrats’ demand to include Affordable Care Act subsidy extensions but allows a separate vote on that issue in December.
“This takes another risk off the table,” said Sonu Varghese of Carson Group. “The Fed will now have access to macro data again, preventing them from going into the December meeting blind.”
How are global developments influencing US markets?
China added fresh geopolitical tension after reports emerged that Beijing will block companies tied to the US military from accessing rare earth exports.
According to The Wall Street Journal, China’s new “validated-end user” system aims to ensure rare earths don’t reach defense contractors. The move could disrupt supply chains for automakers and aerospace firms serving both civilian and defense sectors.
The policy comes just weeks after Presidents Trump and Xi Jinping agreed to a trade truce, with the US easing tariffs in exchange for China lifting certain export restrictions.
Which major stocks made the biggest moves today?
In early trading, Nvidia fell 2%, while CoreWeave dropped 11%.
Meanwhile, Paramount Skydance jumped 5.7% after strong earnings and a plan to cut costs and raise streaming prices next year. Rigetti Computing tumbled 5% after its Q3 revenue of $1.9 million missed analyst estimates.
DoorDash, Duolingo, and Roblox each saw double-digit declines as investors worried about rising AI spending and slower profitability. Meanwhile, megacaps like Apple and Microsoft held steady, helping limit deeper losses in the broader S&P 500.
The Dow’s resilience came from gains in energy and financial stocks, which offset tech’s drag.
Traders will now focus on the House’s vote on the shutdown bill, as well as upcoming inflation data and Fed commentary.
With the AI trade cooling, analysts expect rotation toward cyclical sectors like energy, financials, and consumer staples. However, volatility could rise if the labor data continues to weaken or if the Fed signals hawkishness in its December meeting.
Markets remain sensitive to earnings revisions and economic indicators, with investors closely tracking whether the S&P 500 can hold above 5,000, a level seen as critical for maintaining market momentum into year-end.
