Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.9%), Nasdaq Composite (-1.5%), and DJIA (-0.4%) are under pressure today as mega-caps and other AI plays face some profit-taking. 

Palantir Technologies (PLTR 193.50, -13.68, -6.61%) moved lower despite an impressive beat-and-raise earnings report, with investors seemingly focused on the stock's lofty valuations that feature a forward price-to-earnings ratio above 230x. 

The move prompted a sell-off across mega-cap and tech names, bringing the recent AI-fueled rally to at least a temporary stop. Chipmakers are among today's laggards, sending the PHLX Semiconductor Index 2.5% lower, as the broader information technology sector (-1.6%) is the worst-performing S&P 500 sector today. 

NVIDIA's (NVDA 200.93, -5.95, -2.88%) loss negates its 2.2% gain yesterday, while Apple (AAPL 269.85, +0.80, +0.30%) is the lone "magnificent seven" name in positive territory. 

Mega-cap weakness pushes the communication services (-1.5%) and consumer discretionary (-1.4%) sectors lower, with the latter facing pressure in its cruise line components after Norwegian Cruise Line (NCLH 19.02, -3.16, -14.22%) beat earnings estimates but missed on revenues and issued below-consensus Q4 guidance. 

The industrials sector (-1.1%) is also pressured by post-earnings weakness. Uber (UBER 93.71, -6.01, -6.03%) delivered a strong Q3 earnings report but issued Q4 adjusted EBITDA guidance slightly below expectations, triggering a sell-the-news reaction. 

Meanwhile, the energy sector (-1.1%) rounds out the five S&P 500 sectors that hold a loss of 1.0% or wider. Marathon Petroleum (MPC 182.24, -13.56, -6.92%) lags after missing earnings expectations, and the price of oil has decreased $0.44 (-0.7%) to $60.61 per barrel. 

Only three S&P 500 sectors hold modest gains just after midday. 

The health care sector (+0.4%) is supported by a report that Eli Lilly (LLY 904.05, +7.52, +0.84%) and Novo Nordisk A/S (NVO 48.54, -0.58, -1.17%) will soon announce new drug pricing deals with the White House, according to EndPoint News. 

The financials sector (+0.2%) benefits from a solid post-earnings move from Apollo Global Management (APO 132.31, +8.36, +6.74%), while the consumer staples sector (+0.1%) holds a slight gain. 

Decliners outpace advancers by a roughly 2-to-1 ratio on the NYSE and a roughly 3-to-1 clip on the Nasdaq. While negative breadth has been prominent over the past several sessions, the pullback across mega-cap names has pushed the major averages further from their recent record highs. The Vanguard Mega Cap Growth ETF (-1.5%) underperforms, and the market-weighted S&P 500 (-0.9%) underperforms the S&P 500 Equal Weighted Index (-0.5%) as a result. 

With few macro catalysts, investors are focused on lofty valuations, pressuring mega-cap and tech stocks despite solid earnings, and showing no signs of a buy-the-dip response.