(Bloomberg) — US stock futures extended losses along with Asian shares as Palantir Technologies Inc.’s earnings and uncertainty over the Federal Reserve’s policy outlook weighed on sentiment.
Contracts for the S&P 500 fell 0.4%. The underlying index posted a modest gain Monday even as more than 300 of its members retreated. Nasdaq 100 futures fell 0.6%, with Palantir declining more than 4% in extended trading on concerns about the company’s lofty valuation after a record run-up. Asian shares dropped 0.4% as the South Korean benchmark lost more than 2%.
A gauge of the dollar extended its gains to a fifth day after the greenback strengthened against all other Group-of-10 currencies, trading at levels last seen in August. The advance has come amid mixed signals from Fed officials, following Chair Jerome Powell’s warning last week that a rate cut in December isn’t a foregone conclusion.
A flurry of central bank officials offered contrasting views on the outlook for further rate cuts, with Chicago Fed President Austan Goolsbee saying he’s more concerned about inflation than the job market. Even as US factory activity contracted for an eighth straight month in October, global stocks hovered near record highs, driven by technology heavyweights and stoking calls for broader-market consolidation.
“It’s the Fed again,” said Anna Wu, a cross-asset strategist at Van Eck. “The inflation comment startled the markets and weighed on sentiment.”
Economists and policymakers are relying more on private reports such as the ISM survey for clues on the economy and job market in the absence of official data because of the US government shutdown. Friday’s scheduled employment report is also poised to be delayed as a result.
The Institute for Supply Management’s manufacturing index eased 0.4 point to 48.7, according to data released Monday. Readings below 50 indicate contraction, and the measure has been stuck in a narrow range for most of this year.
“With US data softening and Fed officials keeping policy optionality alive, investors are reassessing positioning rather than chasing risk,” said Billy Leung, an investment strategist at Global X Management.
Gold edged lower for a third consecutive session. Treasuries steadied, while oil fell as the market weighed OPEC+’s decision to pause output hikes.
Meanwhile, Fed Governor Lisa Cook said she sees the risk of further labor-market weakness as greater than the chance that inflation will pick up. She stopped short of endorsing another interest-rate cut next month.
“Looking ahead, policy is not on a predetermined path,” Cook said. “We are at a moment when risks to both sides of the dual mandate are elevated. Every meeting, including December’s, is a live meeting.”
Her comments echoed remarks from her colleagues who were equally noncommittal about whether the central bank should deliver a third straight rate reduction when policymakers convene in December.
San Francisco Fed President Mary Daly said officials should “keep an open mind” about the possibility of a December cut. Governor Stephen Miran noted policy remains restrictive.
Elsewhere, shares in Australia fell ahead of a central bank rate decision later Tuesday, when policymakers are expected to stand pat.
Back to Palantir, the company raised its annual revenue outlook to $4.4 billion and outpaced analyst estimates for third-quarter sales.
Investors have sent the firm’s shares up more than 150% so far this year, closing Monday at a record $207.18. The company had a price-to-sales ratio of 85 as of Friday — the highest in the S&P 500 Index.
Mandeep Singh, senior analyst at Bloomberg Intelligence, said that investors likely wanted more guidance about the following year.
Palantir gave a forecast for the current quarter, Singh said, but “I think everyone wanted some sense of 2026.”
Corporate Highlights:
Starbucks Corp. is selling a majority stake in its China unit to private equity firm Boyu Capital for $4 billion to help accelerate its coffeehouse business in the country. Grab Holdings Ltd. raised its earnings forecast for the year after quarterly profit topped estimates, signaling robust demand for the Southeast Asian ride-hailing and food delivery firm’s new products. Netflix Inc. is in talks to license video podcasts distributed by iHeartMedia Inc. as it looks to compete head on with YouTube, according to people familiar with the conversations.
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.4% as of 12:01 p.m. Tokyo time Japan’s Topix rose 0.4% Australia’s S&P/ASX 200 fell 0.9% Hong Kong’s Hang Seng rose 0.2% The Shanghai Composite fell 0.1% Euro Stoxx 50 futures fell 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1513 The Japanese yen was little changed at 154.10 per dollar The offshore yuan was little changed at 7.1271 per dollar Cryptocurrencies
Bitcoin fell 0.3% to $106,566.26 Ether rose 1% to $3,638.41 Bonds
The yield on 10-year Treasuries was little changed at 4.10% Japan’s 10-year yield advanced two basis points to 1.675% Australia’s 10-year yield advanced one basis point to 4.35% Commodities
West Texas Intermediate crude fell 0.3% to $60.87 a barrel Spot gold fell 0.3% to $3,988.85 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi and Winnie Hsu.
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