Losses for Big Tech pull Wall Street lower

NEW YORK (AP) — Stocks fell on Wall Street Tuesday, pulled down by losses in the same big tech companies that have been the main drivers of the market’s rally so far this year.

The downturn pulled every major index further away from the all-time highs set just last week. Losses were spread broadly throughout every sector, but technology stocks were the heaviest weights.

Palantir Technologies, which had more than doubled so far this year, fell 7.9% despite reporting results that beat analysts’ forecasts. Nvidia also reversed course from a day earlier, falling 4%, while Microsoft fell 0.5%.

The technology sector is typically the driving force behind the market’s broader movement, including its record-setting year. Huge values for companies including Nvidia and Microsoft give them outsize influence over the broader market’s direction.

The S&P 500 fell 80.42 points, or 1.2% to 6,771.55. The index set its most recent all-time high last week, and is still up more than 15% for the year.

The Dow Jones Industrial Average fell 251.44 points, or 0.5%, to 47,085.24. The technology heavy Nasdaq fell 486.09 points, or 2%, to 23,348.64.

Wall Street remains focused on corporate earnings. Roughly three out of every four companies within the S&P 500 have reported their latest results, which have been mostly better than analysts expected.

“However, expectations for technology firms seem higher, and disappointments appear to be having a disproportionately negative effect,” Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, wrote in a note to investors.

Animal health care company Zoetis plunged 13.8% after cutting its sales forecast for the year. Norwegian Cruise Line slid 15.3% after giving Wall Street a mixed earnings report and forecast.

Uber slumped 5.1% despite reporting financial results that beat analysts' expectations.

Several big companies will report their latest financial results later this week, including McDonald's, Expedia Group and Qualcomm.

The latest round of corporate profit reports and forecasts have taken on more significance for Wall Street amid the U.S. government shutdown. Investors and economists are trying to gauge the health and direction of the U.S. economy without the latest economic updates on inflation and employment.

The lack of timely economic data has also left the Federal Reserve without many of the resources it needs to make decisions on interest rate policy. That has added more doubts to whether the central bank will continue cutting its benchmark interest rate amid stubborn inflation and a weakening job market.

Consumer prices rose 3% in September, the highest increase since January. At the same time, hiring has stalled. That mix of conditions puts the Fed in a tough position. Cutting rates to help the economy endure a weakening job market could also result in hotter inflation.

The government shutdown has already resulted in a lack of monthly employment data for September and will likely result in a lack of data on consumer prices for October.

President Donald Trump’s volatile trade war with China and other nations has also added to the ongoing uncertainty over the economy’s path forward.

The central bank cut its benchmark interest rate in October for the second time this year. Fed Chair Jerome Powell has cautioned that further rate cuts aren't guaranteed. Other Fed members have since also expressed concerns about more rate cuts with inflation remaining stubbornly above the central bank’s target of 2%.

Wall Street is forecasting a 70% chance of a rate cut at the Fed’s next meeting in December, according to CME FedWatch. That’s down from a 90.5% a week ago, just before the last Fed meeting.

Outside of earnings, Tesla fell 5.1% after Norway’s sovereign wealth fund, one of the electric car maker’s biggest investors, said Tuesday that it will vote against a proposed compensation package that could pay CEO Elon Musk as much as $1 trillion over a decade.

There will be more than a dozen company proposals up for a vote Thursday during Tesla’s annual meeting, but none have generated more division than Musk’s potentially massive pay package.

Yum Brands jumped 7.3% after the company said it is considering selling its Pizza Hut unit, which has struggled to compete in a crowded pizza market.

Novo Nordisk slipped 1.8% after it raised its offer to buy drugmaker Metsera, which jumped 20.5%. Novo Nordisk is trying to outbid rival Pfizer, which fell 1.5%.

European markets were mostly lower and Asian markets fell overnight.

Treasury yields edged lower in the bond market. The yield on the 10-year Treasury edged down to 4.09% from 4.10% late Monday.