U.S. Stocks Retreat from Record Highs as AI Trade Cools

Barry Adams
04 Nov, 2025
New York City

Wall Street indexes struggled to rise above the flatline amid worries about a market rally concentrated in a few mega-cap stocks. 

The S&P 500 index decreased 0.2%, and the tech-heavy Nasdaq Composite dropped 0.4% as investors debated the possible market correction. 

Benchmark indexes have rebounded more than 37% from their lows in early April; however, those gains are powered by AI enthusiasm and earnings results surpassing market expectations. 

Moreover, the Federal Reserve's two rate cuts in 2025 have supported market enthusiasm, and investors are looking for one additional rate cut this year followed by two more in the first half of 2026. 

The U.S. federal government shutdown shows no signs of ending, and the data blackout has lowered visibility into the inner workings of the U.S. economy. 

Investors are hoping that the labor market's conditions will improve and the jobless rate and churn will stabilize in the months ahead. 

 

U.S. Stock Movers 

Palantir Technologies dropped 7% to $192.80, and the company reported better-than-expected third-quarter results and fourth-quarter guidance. 

Revenue increased 63% to $1.2 billion from $725.5 million, net income advanced more than threefold to $476.7 million from $149.3 million, and diluted earnings per share rose to 18 cents from 6 cents a year ago.  

For the fourth quarter, the company guided revenue between $1.327 billion and $1.331 billion, and adjusted income from operations between $695 million and $699 million. 

Clorox Company increased 1.7% to $111.0, and the cleaning products maker reported better-than-expected fiscal first-quarter results. 

Net sales decreased 19% to $1.4 billion from $1.7 billion, net income declined 20% to $80 million from $99 million, and diluted earnings per share fell 19% to 65 cents from 80 cents a year ago. 

Adjusted earnings per share dropped 54% to 85 cents from $1.86 a year ago, primarily due to lower net sales related to its ERP transition.