Futures Pointing To Continued Weakness On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly lower open on Wednesday, with stocks likely to see further downside following the sell-off seen in the previous session.

Lingering concerns about valuations may lead to continued weakness on Wall Street amid worries about a potential artificial intelligence bubble.

Advanced Micro Devices (AMD) may lead the markets lower, as the chipmaker is slumping by 2.5 percent in pre-market trading.

The drop by shares of AMD comes after the company reported better than expected third quarter results but seemingly disappointed investors by providing adjusted margin guidance for the fourth quarter in line with estimates.

Shares of Super Micro Computer (SMCI) are also plunging by 7.6 percent in pre-market trading after the tech company reported fiscal first quarter results that missed expectations.

Cloud networking company Arista Networks (ANET) is also seeing substantial pre-market weakness despite reporting third quarter results that exceeded analyst estimates on both the top and bottom lines.

However, the futures regained some ground following the release of a report from payroll processor ADP showing private sector employment in the U.S. rebounded by more than expected in the month of October.

ADP said private sector employment climbed by 42,000 jobs in October after slipping by a revised 29,000 jobs in September.

Economists had expected private sector employment to rise by 25,000 jobs compared to the loss of 32,000 jobs originally reported for the previous month.

Stocks staged a recovery attempt an early slump on Tuesday but showed a notable move back to the downside over the course of the trading session. The major averages all moved lower on the day following the mixed performance seen during trading on Monday.

The tech-heavy Nasdaq posted a particularly steep loss on the day, plunging 486.09 points or 2.0 percent to 23,348.64. The S&P 500 also slumped 80.42 points or 1.2 percent to 6,771.55, while the narrower Dow slid 251.44 points or 0.5 percent to 47,085.24.

The sell-off on Wall Street came amid concerns about the valuations of tech stocks, which have helped lead the markets to record highs amid optimism about artificial intelligence.

Palantir Technologies (PLTR) led the way lower, plunging by 8.0 percent even though the software company reported better than expected fiscal fourth quarter results and raised its revenue guidance.

"It speaks to just how supercharged Palantir's share price has been in 2025 that even a set of numbers as impressive as those it produced for its third quarter were insufficient to sustain the momentum," said Dan Coatsworth, head of markets at AJ Bell.

He added, "Even in the context of the booming AI sector, the company's valuation has reached high levels as investors have seized on its perceived close links with the Trump administration and AI-driven revenue growth."

Ride-hailing and food-delivery company Uber Technologies (UBER) also tumbled by 5.1 percent despite reporting third quarter revenues that exceeded analyst estimates.

On the other hand, shares of Yum! Brands (YUM) surged by 7.3 percent after the fast food giant reported better than expected third quarter results.

The weakness on Wall Street also came as Goldman Sachs (GS) CEO David Solomon warned of a significant correction by the equity markets over the next 1-2 years.

"It's likely there'll be a 10 to 20 percent drawdown in equity markets sometime in the next 12 to 24 months," Solomon said at the Global Financial Leaders' Investment Summit in Hong Kong. "Things run, and then they pull back so people can reassess."

Gold stocks showed a substantial move to the downside on the day, resulting in a 4.5 percent nosedive by the NYSE Arca Gold Bugs Index. The sell-off by gold stocks cane amid a steep drop by the price of the precious metal.

Considerable weakness was also visible among computer hardware stocks, as reflected by the 4.4 percent plunge by the NYSE Arca Computer Hardware Index. The index pulled back off a record closing high.

Semiconductor stocks also moved sharply lower over the course of the session, dragging the Philadelphia Semiconductor Index down by 4.0 percent.

Airline, steel, networking and energy stocks also saw significant weakness, moving lower along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are slipping $0.38 to $60.18 a barrel after falling $0.49 to $60.56 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,987.10, up $26.60 compared to the previous session's close of $3,960.50. On Tuesday, gold tumbled $53.50.

On the currency front, the U.S. dollar is trading at 153.88 yen compared to the 153.67 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is unchanged compared to yesterday's $1.1482.

Asia

Asian stocks tumbled on Wednesday as tech stocks succumbed to heavy selling pressure on increasing worries over stretched valuations and an AI bubble.

Uncertainty surrounding Federal Reserve policy and signs that the U.S. is edging closer to stagflation also kept investors on edge.

China's Shanghai Composite Index closed up 0.2 percent at 3,969.25, reversing early losses after a private survey showed China's services sector continued to expand in October, but at its slowest pace in three months.

Hong Kong's Hang Seng Index pared early losses to finish marginally lower at 25,935.41 after China's State Council's tariff commission said it would suspend an additional 24 percent additional tariff on U.S. goods for one year but retain a 10 percent levy.

Japanese markets slumped after the Bank of Japan's September meeting minutes showed board members debated the growing case for a rate hike.

The Nikkei 225 Index dove 2.5 percent to 50,212.27 after having plunged 4.7 percent to 49,073.58 earlier, slipping below the psychologically important 50,000 level for the first time since October 27. The broader Topix Index settled 1.3 percent lower at 3,268.29.

Among the prominent decliners, Advantest lost 6 percent, SoftBank Group shares plummeted 10 percent and Hitachi Construction Machinery nosedived 12.2 percent.

Seoul stocks ended sharply lower on valuation concerns and fears of an AI bubble in the U.S. The Kospi tumbled 2.9 percent to 4,004.42 after repeatedly hitting record closing highs in recent sessions. At one point, the index dropped more than 6 percent to 3,867.81.

Tech heavyweights led losses, with Samsung Electronics tumbling 4.1 percent and SK Hynix falling 1.2 percent.

Australian markets ended slightly lower, recouping some early losses after China suspended retaliatory tariffs on major U.S. agricultural products including soybeans, corn, wheat, sorghum, and chicken for one year.

The benchmark S&P/ASX 200 Index slipped 0.1 percent to 8,802, extending losses for a second straight session as weak iron ore prices weighed on the mining sector. The broader All Ordinaries Index closed down 0.3 percent at 9,071.20.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index inched up 0.1 percent to 13,620.98, notching a new record high as weak jobs data reinforced investor views of a rate cut later this month.

Europe

European stocks are flat to slightly lower on Wednesday to hover near a two-week low following an overnight sell-off in U.S. technology stocks.

Helping limit regional losses, new data showed that German factory orders rebounded at a stronger-than-expected pace in September, driven by higher demand for auto and electrical equipment.

Factory orders expanded 1.1 percent in September from August, Destatis reported. Orders were forecast to advance 0.9 percent, reversing a revised 0.4 percent drop in August.

While the U.K.'s FTSE 100 Index is up by 0.2 percent, the French CAC 40 Index is down by 0.1 percent and the German DAX Index is down by 0.3 percent.

Bouygues shares have advanced. The French conglomerate maintained its full-year sales growth guidance after reporting a stronger than expected operating profit for the first nine months of the year.

German healthcare group Fresenius has also moved to the upside after raising its full-year EBIT guidance.

Kontron has also surged. The technology group confirmed its 2025 earnings forecast after reporting strong margin growth during the first nine months of the financial year.

Carmaker BMW has also jumped as it posted a higher-than-forecast profit margin in its core car business in the third quarter.

Barratt Redrow, Britain's largest homebuilder, has also rallied after keeping fiscal 2026 guidance for total home completions unchanged.

Dutch supermarket group Ahold Delhaize has also shot higher after it announced plans to carry out a 1 billion euro share buyback.

Meanwhile, medical technology company Siemens Healthineers has plunged after posting fourth-quarter revenue slightly below expectations.

Marks And Spencer has also fallen. Profits at the retailer more than halved in first half after a major cyberattack earlier this year disrupted its online operations.

U.S. Economic News

Payroll processor ADP released a report on Wednesday showing private sector employment in the U.S. rebounded by more than expected in the month of October.

ADP said private sector employment climbed by 42,000 jobs in October after slipping by a revised 29,000 jobs in September.

Economists had expected private sector employment to rise by 25,000 jobs compared to the loss of 32,000 jobs originally reported for the previous month.

At 10 am ET, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of October.

The ISM's services PMI is expected to inch up to 50.8 in October from 50.0 in September, with a reading above 50 indicating growth.

The Energy Information Administration is due to release its report on crude oil inventories in the week ended October 31st at 10:30 am ET.

Crude oil inventories are expected to increase by 1.8 million barrels after tumbling by 6.9 million barrels in the previous week.