Stocks Finish Sharply Lower on Concerns About Lofty Valuations

Market Overview - The markets are anticipating oral arguments at the Supreme Court regarding the legality of President Trump's reciprocal tariffs, with potential implications for over $80 billion in tariffs already collected [1] - The S&P 500 Index closed down -1.17%, while the Dow Jones and Nasdaq 100 also experienced declines, indicating a risk-off sentiment in the market [5][4] Economic Indicators - The markets are pricing in a 69% chance of a -25 basis point rate cut at the upcoming FOMC meeting [2] - US total vehicle sales for October were reported at 15.32 million, below expectations of 15.50 million, marking the lowest sales in 14 months [2] Corporate Earnings - Q3 earnings season is strong, with 80% of S&P 500 companies reporting better-than-expected results, although profits are projected to rise by only +7.2% year-over-year, the smallest increase in two years [6] - Notable earnings reports include Palantir Technologies, which despite better-than-expected Q3 sales, saw its stock decline due to high valuations [17] Sector Performance - The technology sector, particularly the "Magnificent Seven" stocks, faced pressure with significant declines in companies like Tesla (-5%) and Nvidia (-2%) [12] - Semiconductor stocks also fell, with Micron Technology down more than -6% and Intel down more than -5% [13] International Markets - Overseas markets also settled lower, with the Euro Stoxx 50 and China's Shanghai Composite both experiencing declines [7] Interest Rates - The 10-year T-note yield fell to 4.085%, supported by lower bond yields and safe-haven demand due to stock market weakness [8][9] - European government bond yields also decreased, with the 10-year German bund yield falling to 2.654% [10]