US Markets Today: S&P 500, Nasdaq Slip Over 1% As AI Darling Palantir Slumps On Valuation Concerns

The major US stock market indices opened in the red on Tuesday after AI giant Palantir Technologies Inc.'s earnings failed to make a positive impact.

S&P 500 opened 1.10% or 75.63 points lower at 6,776.34, tech-heavy Nasdaq Composite opened 1.50% or 358.35 points lower at 23,476.37 and Dow Jones Industrial average opened 0.71% or 337.76 points lower at 46,998.92.

As of 8:53 p.m (IST). Nasdaq traded 0.87% lower, while S&P 500 and Dow Jones traded 0.56% and 0.19% lower respectively.

Although Palantir's revenue beat analysts' estimates, the earnings fell short of justifying the company's high valuations. The price-to-sales ratio stood at 85, and was the highest in the S&P Index as of Friday, according to Bloomberg.

Gil Luria from D.A. Davidson told Bloomberg that the numbers are "disengaged" from fundamentals and that, "This is a company with a $4 billion run rate that’s growing 63%. There’s nothing even remotely close to that, which is how we got to the situation where the valuation is at unprecedented levels"

Palantir Technologies' slumped nearly 10% to $189.25 in the early minutes of trade.

Other tech names trading in the red include Intel Corp., which traded 2.55% lower at $38.16; shares of Microsoft Corp. also traded 0.73% lower at 513.08. Besides them, Tesla's stock also fell more than 4% in early trade.

Seven out of the 11 sectoral indices traded in the red while only four traded higher.

After the markets opened, spot gold was trading 1.24% lower at $3,951.93. Crude oil also edged lower, with West Texas Intermediate futures trading 0.77% down at $60.58 a barrel, and Brent Crude slipped 0.71% to $64.43.

The Bloomberg Dollar Spot Index rose 0.3%, Euro fell 0.4% to $1.1475, British Pound fell 0.8% to $1.3036, and Japanese Yen rose 0.5% to 153.48 per dollar.

Bitcoin, the largest traded cryptocurrency, fell 3.6% to $103,016.75.