U.S. stock futures pointed to a muted open on Wednesday, with major indexes expected to extend their recent declines amid ongoing concerns about overheated valuations and renewed anxiety over a potential AI-driven market bubble.
The Dow, S&P 500, and Nasdaq futures all hovered slightly below the flatline, signaling another cautious session after Tuesday’s widespread sell-off that hit growth and technology shares particularly hard.
Advanced Micro Devices (NASDAQ:AMD) was under pressure, slipping 2.5% in premarket trading, after the chipmaker’s strong third-quarter earnings were offset by margin guidance for the fourth quarter that merely met expectations. Super Micro Computer (NASDAQ:SMCI) tumbled 7.6% after missing Wall Street forecasts, while Arista Networks (NYSE:ANET) also traded lower despite topping analyst estimates on both earnings and revenue.
Investor sentiment improved slightly after a stronger-than-expected ADP employment report, which showed that U.S. private payrolls rose by 42,000 in October, compared to a revised decline of 29,000 the previous month. Economists had expected a smaller gain of 25,000 jobs.
On Tuesday, markets attempted a brief recovery early in the session but turned decisively lower by the close. The Nasdaq Composite sank 2.0% to 23,348.64, the S&P 500 dropped 1.2% to 6,771.55, and the Dow Jones Industrial Average fell 0.5% to 47,085.24.
The slide was driven by mounting doubts over lofty tech valuations that have propelled stocks to record levels this year on optimism about artificial intelligence.
Palantir Technologies (NASDAQ:PLTR) led the declines, tumbling 8% even after reporting better-than-expected results and raising 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.”
Elsewhere, Uber Technologies (NYSE:UBER) fell 5.1%, despite topping revenue estimates, while Yum! Brands (NYSE:YUM) jumped 7.3% after reporting stronger-than-expected third-quarter results.
Further dampening sentiment, Goldman Sachs CEO David Solomon cautioned investors about the risk of a significant market pullback, warning, “It’s likely there’ll be a 10 to 20 percent drawdown in equity markets sometime in the next 12 to 24 months. Things run, and then they pull back so people can reassess.”
In sector moves, gold miners and semiconductor stocks led the declines, with the NYSE Arca Gold Bugs Index plunging 4.5% and the Philadelphia Semiconductor Index sliding 4.0%. The NYSE Arca Computer Hardware Index dropped 4.4%, pulling back from recent highs.
Losses also spread across airline, steel, networking, and energy stocks, underscoring a broad retreat as investors reassessed valuations and global growth prospects.