Major U.S. stock indexes opened lower on the 5th as big tech tied to artificial intelligence (AI), which has led the market, weakened.
At 10:15 a.m., the Dow Jones Industrial Average on the New York Stock Exchange (NYSE), which focuses on blue chips, stood at 47,233.51, down 103.17 points, or 0.22%, from the prior session.
At the same time, the Standard & Poor's (S&P) 500, centered on large caps, fell 41.64 points, or 0.61%, to 6,810.33. The tech-heavy Nasdaq Composite was at 23,611.36, down 223.36 points, or 0.94%.
Shares of many top market-cap names, including Nvidia, Apple, Microsoft, Alphabet (Google), and Tesla, are trending lower.
In particular, Palantir Technologies (PLTR) reported results that beat market expectations, but concerns about valuation have flared, pushing the stock down more than 7%. Palantir's 12-month forward price-earnings ratio (PER, market capitalization ÷ net income) is more than 300 times.
The U.S. federal government shutdown has stretched into its 35th day, and the Institute for Supply Management (ISM) released its October manufacturing Purchasing Managers' Index (PMI) below market expectations, adding to headwinds.
With the market having taken a December rate cut as a given, a succession of hawkish (preferring monetary tightening) remarks by Federal Reserve Commissioners indicating they cannot prejudge whether to cut rates also weighed on sentiment.
With major indexes setting a new record high, heads of global investment banks (IBs) advised that investors should keep the possibility of a correction in mind.
David Solomon, Goldman Sachs chief executive officer (CEO), speaking at the Global Financial Leaders' Investment Summit in Hong Kong on the day, said, "There is a high possibility that the stock market will fall 10% to 20% over the next one to two years."
Ted Pick, Morgan Stanley CEO, also said at the same event, "Barring a plunge driven by macroeconomic effects, we should accept the possibility of a 10% to 15% decline."