Stocks slipped sharply after a wide risk-off move that erased Monday’s gains. Palantir (NYSE:PLTR) fell about 6% on its earnings day, prompting fresh scrutiny of lofty tech valuations. Traders also faced political events in the United States and a critical UK budget that could reshape the timing of Bank of England moves. Short term, markets may trade on earnings headlines and political noise. Longer term, valuation questions and central bank signals will matter for rates and equity returns in the US, Europe and Asia. The session opens with futures softer, yields retreating and volatility edging higher, setting the tone for a busy economic and corporate calendar globally.
Risk tone and market plumbing heading into the session
Equity futures turned negative after another day of headline-driven moves. Wall Street index futures were down more than 1% ahead of Tuesday’s open and global bourses were broadly lower. A spike in the VIX back above long term averages near 20 reflected renewed caution among investors. Treasury yields retreated from recent highs while the dollar was pushed in different directions by cross market flows.
Crypto suffered in the same risk off move and Bitcoin fell to its weakest level in more than four months. That move compounded the pressure on risk assets already facing an uneasy mix of earnings, central bank commentary and political events. The retreat in yields eased some pressure on longer duration tech names but raised questions about where support might return.
Corporate catalysts keep markets on edge
Palantir (NYSE:PLTR) hurt sentiment when the stock slid about 6% on an earnings day that, despite a headline beat and a solid revenue forecast, failed to satisfy a market that has vastly repriced AI beneficiaries. The firm has more than doubled this year on AI excitement and government and business demand, but even a modest hint of slowing revenue growth is jarring for a name trading at a reported 12 month forward price to earnings ratio near 246.
That contrast was stark against Nvidia (NASDAQ:NVDA) which trades at a far lower forward multiple by comparison. Market watchers pointed to the widening gulf between high flyers and more established tech leaders as a key tension for sentiment. Adding to the corporate news flow, Amazon (NASDAQ:AMZN) rose after it announced a large cloud deal with OpenAI that underlined continued heavy investment into AI infrastructure.
Mergers moved volumes as well. Kimberly Clark (NYSE:KMB) slid after it agreed to buy Kenvue (NYSE:KVUE) for more than $40 billion and the takeover pushed Kenvue shares sharply higher. A string of big deals has kept dealmaking in focus. Worldwide M A totaled about $3.5 trillion in the first ten months of 2025, up roughly 38% from a year earlier, the bulk of which has fed activity in the United States and Europe.
Corporate earnings remain a central theme. The session includes reports from AMD (NASDAQ:AMD), Super Micro (NASDAQ:SMCI), Amgen (NASDAQ:AMGN) and Pfizer (NYSE:PFE) among others. Results from these names could determine whether the risk off tone deepens or whether buyers reappear to chase dips in beaten up segments of the market.
Politics and policy that matter now
Political events are amplifying market moves. US local elections are on the radar and can influence short term risk appetite. In addition, the Supreme Court is due to hear arguments on the legality of some US import tariffs later in the week. That case could have trade and corporate implications across industries that depend on cross border supply chains.
In the United Kingdom, finance minister Rachel Reeves framed her budget next week as one of hard choices and signaled broad tax rises to protect public spending while reducing debt. That speech weighed on sterling and helped lower gilt yields, feeding market speculation about when the Bank of England may shift to easing. The BoE faces acute political optics as it balances inflation, fiscal repair and the sequencing of any future rate moves.
Fed policy expectations have also become more nuanced. Several Fed officials have been less clear about the probability of another rate cut this year. Meanwhile, US manufacturing activity remained in contractionary territory for an eighth straight month, but the survey retained elements that have historically correlated with broader expansion. Fed lending data showed business loan demand from large and mid sized firms strengthened by the most in about three years in the third quarter, a point that complicates the narrative for further policy easing.
Regional market reactions and what to watch today
Asia showed mixed signals. China extended a year long weakness in LNG imports, and Beijing sought to expand mutual investment ties with Russia, underlining geopolitical and economic threads that bear on regional flows. Japan saw a sharp jump in the yen after finance minister Satsuki Katayama warned against excessive weakness. That move demonstrated how policy comments can trigger immediate currency responses.
In Europe, sterling slid to its lowest in over six months on the dollar after the UK policy stance tilted toward tighter fiscal policy. Those moves are important for multinational corporates and for global asset managers weighing currency exposures.
For the day ahead, market participants will track a heavy earnings slate and several policy speeches including a Bank of England deputy governor and a Federal Reserve vice chair for supervision. Traders will also watch economic prints such as the US and Canada trade balances and any fresh signals on services and wage pressures in the UK. These items, coupled with the legal and political events on the calendar, are likely to keep volatility elevated and keep attention focused on which news flow dominates price action.
Expect a trading session driven by headlines, corporate reports and policy comments. The immediate market reaction will hinge on whether earnings and political news deepen the risk off tone or provide an entry point for buyers. Over the coming weeks, investors will likely weigh valuation concerns, central bank guidance and the pace of M A activity when reappraising exposures across the US, European and Asian markets.
