U.S. Stock Markets Decline Amid Economic Concerns; Palantir Shares Surge on Strong Earnings

On Tuesday, major U.S. stock indexes declined amid growing concerns over the nation's economic health. The S&P 500 fell 0.3%, while the Nasdaq Composite dropped 0.5%. The Dow Jones Industrial Average remained relatively flat, rising 0.1%.

The downturn was influenced by a weaker-than-expected report on the services sector, encompassing transportation and retail, which heightened fears that recent tariffs are adversely affecting the economy. Despite this, optimism about potential Federal Reserve interest rate cuts and some strong quarterly earnings reports helped limit the market's losses.

In corporate news, Palantir Technologies reported a significant milestone in the second quarter, surpassing $1 billion in quarterly revenue for the first time. This achievement was driven by a 48% year-over-year increase in sales, fueled by rising demand for its AI-driven software. Government sales spiked 53%, contributing to the company's decision to raise its annual revenue forecast to between $4.14 billion and $4.15 billion.

Following the earnings announcement, Palantir's shares surged 5% in premarket trading. The company has significantly benefited from increased U.S. defense spending, securing several major government contracts, including a $30 million deal with U.S. Immigration and Customs Enforcement and potential U.S. Army contracts worth up to $10 billion.

Other notable market movements included pharmaceutical giant Pfizer, which rose nearly 5%, and heavy equipment manufacturer Caterpillar, a Dow component, which declined more than 1% after each company reported earnings. Shares of Advanced Micro Devices were down 2% ahead of the anticipated release of the chipmaker's results after the closing bell.

In the technology sector, mega-cap stocks were mixed. Chip giants Nvidia and Broadcom each declined more than 1%, while Microsoft, Meta Platforms, and Tesla also lost ground. Conversely, Amazon rose more than 1%, with Apple and Alphabet ticking higher. Meta, Microsoft, Amazon, and Apple all reported results last week that surpassed analysts' expectations.

The yield on the 10-year Treasury note stood at 4.20%, unchanged from the previous day's close. The U.S. dollar index rose 0.2% to 98.95, rebounding from two straight days of declines. Bitcoin was at $113,100, down from an overnight high of $115,400. West Texas Intermediate crude oil futures declined 1.3% to $65.40 per barrel, marking the fifth consecutive session of losses, while gold futures rose 0.2% to $3,435 an ounce, extending a four-day rally.