Analysts pointed to “profit taking” as a possible reason, a situation where assets are sold after their price has risen significantly.Amid the U.S. government shutdown, there is also no new government data that “supports our assumptions about economic growth,” says Art Hogan of B. Riley Wealth Management.
“When you get to the high (appreciation) level we are at now, it’s easy to get dizzy,” he added.
Among individual companies, Palantir, the powerful data and AI company with close ties to US national security agencies, saw its share price fall 8.7 percent in early trading. This happened despite the data analytics and artificial intelligence company posting quarterly results this week that beat analyst expectations, while issuing better-than-expected fourth-quarter guidance. “The simplest explanation is that there is just profit taking this morning,” said Patrick O’Hare of Briefing.com.
“What remains to be seen is whether there will be a similarly simple approach to allowing the opening weakness to play out before players step back to buy the weakness,” he added in a note.
O’Hare noted that this has been “a rewarding modus operandi since the April lows, with most of the rewards accruing to the mega-cap and growth stocks.”
Meanwhile, all the “Magnificent 7” stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla – fell as trading began.
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