Stock market today: Nasdaq, S&P 500 fall as investors digest flood of tech earnings, partial government shutdown

By a Senior Financial Correspondent

NEW YORK — U.S. equities finished a volatile session mostly lower on Tuesday as a torrent of corporate earnings presented a mixed picture for the technology sector, while a prolonged government shutdown and wild swings in precious metals kept investors on edge. The market's early optimism, fueled by strong results in the artificial intelligence space, evaporated through the trading day, highlighting a growing indecision among investors navigating a complex economic and corporate landscape.

The tech-heavy Nasdaq Composite led the decline, shedding 0.8% after failing to hold onto opening gains. The broader S&P 500, which flirted with a new record high early in the day, reversed course to close down 0.4%. In a sign of the market's divided nature, the Dow Jones Industrial Average bucked the trend, eking out a 0.1% gain and building on its strong 500-point advance from the previous session.

A Market in Flux: Tech Weighs, Dow Holds Firm

Tuesday's trading session was a tale of two markets. While blue-chip industrials and other value-oriented stocks found modest support, the high-growth technology names that have powered this year's rally faced significant headwinds.

Adding to the cautious mood, the partial U.S. government shutdown entered its fourth day. While the immediate economic impact is limited, a prolonged standoff in Washington could begin to chip away at consumer confidence and delay key economic data releases, further clouding the outlook for investors.

AI Enthusiasm Tempered by Earnings and Rivalries

The artificial intelligence trade, a primary driver of market gains in recent months, was at the center of investor focus, delivering both stunning successes and cautionary tales. The divergence underscores the market's struggle to price in the future of AI amid fears of overspending and a potential bubble.

• Palantir's AI Boost: Data analytics firm Palantir (PLTR) provided a powerful dose of optimism before the bell. Its stock soared after reporting a surge in revenue driven by overwhelming demand for its Artificial Intelligence Platform (AIP). The company's sales outlook also handily beat analyst estimates, signaling that corporate spending on functional AI tools remains robust. The stock, which jumped over 11% in pre-market, held onto its gains throughout the session.

• Chip Giant Tensions: A shadow was cast over the AI hardware space amid reports of cooling relations between chipmaker Nvidia (NVDA) and its highest-profile customer, OpenAI. The AI startup has reportedly expressed dissatisfaction with Nvidia's latest generation of AI chips, bogging down negotiations for a potential investment from Nvidia that could be worth up to $100 billion. Nvidia CEO Jensen Huang downplayed the investment plan on Monday, adding to the uncertainty.

• AMD in the Spotlight: The friction between Nvidia and OpenAI has magnified the importance of chipmaker AMD's (AMD) after-hours earnings report. Investors are desperate for a clearer picture of the competitive landscape and the sustainability of the AI hardware boom. AMD's results and, more importantly, its forward guidance, will be scrutinized for any signs that it is capturing market share from Nvidia or if the entire sector is facing a slowdown in orders.

Earnings Flood Reveals Winners and Losers

With over 100 S&P 500 companies reporting this week, the market is being inundated with fundamental data. Tuesday's results highlighted a clear separation between companies that are executing well and those facing significant structural or competitive challenges.

• PayPal's Plunge: Payments giant PayPal (PYPL) was the day's most notable loser, with its stock tumbling over 16%. The firm missed consensus estimates on both earnings and its forward-looking forecast, sparking fears of slowing growth and intensifying competition. In a major leadership shake-up, the company also announced that Enrique Lores, currently the CEO of HP (HPQ), will take over as its new chief executive. The dramatic sell-off occurred against a backdrop of a broader investor exodus from software and fintech stocks.

• Disney's Leadership Shift: The Walt Disney Company (DIS) announced that its esteemed parks chief, Josh D'Amaro, will succeed Bob Iger as CEO on March 18. The move marks a pivotal transition for the entertainment conglomerate as it navigates the shift to streaming and challenges in its linear television business. Disney shares fell at the open, reflecting uncertainty around the transition and the immense pressure on the incoming leader.

• A Packed Docket: The market is also bracing for results from a diverse slate of industry leaders, including Pepsi (PEP), Pfizer (PFE), and Chipotle (CMG), which will provide further insight into consumer health and corporate spending.

Volatility Grips Commodities, Space Stocks Surge

Beyond equities, other asset classes displayed remarkable volatility, suggesting heightened nervousness and speculative activity across markets.

• Precious Metals Rebound: Gold (GC=F) futures surged over 6%, marking their largest single-day percentage gain since the 2008 financial crisis. The dramatic move came just days after the metal suffered its steepest daily drop in over four decades on Friday. Silver (SI=F) followed suit, rebounding sharply with a more than 13% gain. The wild ride was attributed to an influx of dip-buyers and a potential flight to safety amid market uncertainty.

• Musk's Mega-Merger: In pre-market activity, space-related stocks saw a lift after Elon Musk confirmed that SpaceX (SPAX.PVT) intends to acquire his artificial intelligence venture, xAI (XAAI.PVT). The proposed deal values the combined entity at a staggering $1.25 trillion, signaling continued private-market enthusiasm for both the space exploration and AI sectors.

What to Watch

As investors process Tuesday's conflicting signals, all eyes turn to the remainder of the week's earnings calendar. The market is desperately seeking clarity on several key themes: the durability of the AI boom, the health of the consumer, and the ability of corporations to maintain profit margins.

The upcoming quarterly updates from technology titans Amazon (AMZN) and Alphabet (GOOG) will be critical tests of sentiment. Along with AMD's results, these reports will likely set the tone for the technology sector and the broader market for weeks to come. Traders will also continue to monitor developments from Washington, as a protracted government shutdown remains a key risk to economic stability and investor confidence.