Stocks Retreat on Valuation Concerns

Market Overview - The markets are anticipating oral arguments at the Supreme Court regarding the legality of President Trump's reciprocal tariffs, with a ruling expected by late this year or early 2026 [1] - The S&P 500 Index is down -0.97%, the Dow Jones Industrials Index is down -0.69%, and the Nasdaq 100 Index is down -1.29% [5] - The US government shutdown, now in its sixth week, is the longest in history and is negatively impacting market sentiment and the economy [7] Corporate Earnings - Q3 corporate earnings season is strong, with 80% of S&P 500 companies reporting so far beating forecasts, but profits are expected to rise by only +7.2% year-on-year, the smallest increase in two years [6] - Notable earnings reports include Palantir Technologies, which despite better-than-expected Q3 sales, saw its stock drop over -7% due to high valuations [4][14] - Zoetis cut its full-year revenue estimate to $9.40 billion-$9.48 billion, leading to a stock decline of more than -11% [12] Stock Movements - The Magnificent Seven tech stocks are under pressure, with Tesla down more than -3% and Nvidia down more than -2% [11] - Sarepta Therapeutics is down more than -33% after missing a primary endpoint in a study [12] - Norwegian Cruise Line Holdings is down more than -11% after reporting Q3 revenue below consensus [13] Interest Rates and Economic Indicators - The markets are pricing in a 70% chance of a -25 basis point rate cut at the next FOMC meeting [2] - T-note prices are supported by stock market weakness and the ongoing government shutdown, which may lead to further interest rate cuts [9]