5 Things to Watch Before Tuesday’s Opening Bell

Here are five key things investors need to know to start the trading day:

The stock market dropped yesterday, with technology stocks once again leading the charge lower. Wall Street appears to be de-risking portfolios ahead of a crucial week packed with earnings reports from bellwether companies and key economic data releases.

The confluence of these factors has fueled investor caution, prompting a shift away from riskier assets. Analysts suggest this pullback is a natural adjustment after a period of strong performance, as investors seek to lock in profits and reassess their positions.

Here’s the full rundown:

• The Dow Jones Industrial Average and S&P 500 each recorded their third straight day of losses. Monday’s declines also dragged the S&P 500 into the red for the fourth quarter.
• Nvidia weighed down the broader market with a decline of nearly 2% after a prominent fund disclosed it exited its stake in the chip stock. Shares fell more than 1% in premarket trading this morning as investors brace for its earnings report tomorrow. The move raises questions about institutional sentiment toward the semiconductor giant, particularly given increased competition and evolving market dynamics in the AI chip space.
• Tech hardware stocks Dell and Hewlett Packard Enterprise sank more than 8% and 7%, respectively, yesterday after Morgan Stanley downgraded their ratings, citing concerns about slowing enterprise spending and increased margin pressure. These downgrades highlight the challenges faced by traditional hardware vendors in an increasingly cloud-dominated landscape.
• Apple slid close to 2% after Berkshire Hathaway revealed it continued to trim its stake in the stock in the third quarter. However, Alphabet bucked the market’s slide, climbing 3% following Berkshire’s disclosure of a roughly $4.3 billion position in the Google parent. This investment signals Warren Buffett’s confidence in Alphabet’s long-term growth prospects and its continued dominance in the digital advertising market, despite regulatory scrutiny.
• Bitcoin briefly dropped below $90,000 this morning, hitting its lowest level since late April. The cryptocurrency market remains volatile amid ongoing regulatory uncertainty and concerns about the environmental impact of Bitcoin mining.
• Stock futures fell this morning, indicating investors could be in for another difficult day.

Home Depot missed analysts’ expectations for third-quarter earnings – for the third consecutive quarter. While the company did beat revenue expectations, the earnings miss and subsequent cut to its full-year profit outlook sent shares tumbling more than 2% in premarket trading.

CFO Richard McPhail attributed the disappointing results to “ongoing consumer uncertainty” and “continued pressure in housing,” noting the lack of expected uptick in demand for storm-related products. This suggests a weakening housing market continues to weigh on Home Depot’s performance, despite positive macroeconomic indicators.

Home Depot’s results set the stage for a crucial week of retail earnings. Lowe’s and Target are scheduled for tomorrow, followed by Walmart and Gap on Thursday. Investors will be closely watching these reports for further insights into consumer spending patterns and the overall health of the retail sector.

National Economic Council Director Kevin Hassett raised eyebrows yesterday, suggesting that rapid advancements in artificial intelligence could lead to a slowdown in hiring due to increased worker productivity. He warned of a potential “quiet time in the labor market,” particularly for recent college graduates.

Meanwhile, Federal Reserve Governor Christopher Waller signaled his concern about the “weakening” job market, stating his support for another interest rate cut at the central bank’s next policy meeting in December. These comments reflect growing uncertainties about the labor market’s trajectory and the potential impact of AI on employment.

Former Treasury Secretary Larry Summers announced his decision to step back from public commitments after the House Oversight and Government Reform Committee released emails detailing his communications with convicted sex offender Jeffrey Epstein. The disclosure has ignited a renewed wave of scrutiny surrounding Epstein’s network and those associated with him.

Summers, also a former president of Harvard University and a current board member of OpenAI, expressed “deep shame” in a statement, taking “full responsibility” for his “misguided decision to continue communicating with Mr. Epstein.” He stated he would continue to fulfill his teaching obligations. His position at OpenAI adds another layer of complexity, given the ethical considerations surrounding artificial intelligence development.

The House of Representatives is expected to vote today on a measure to release investigative files about Epstein. President Donald Trump voiced his support for the release, urging Republicans in Congress to support the measure. This bipartisan push for transparency underscores the ongoing public interest in uncovering the full extent of Epstein’s crimes and the involvement of others.

Panera Bread, once the undisputed leader in the fast-casual dining segment, is battling to regain its footing after years of declining traffic. New CEO Paul Carbone is betting on a comprehensive turnaround strategy to revive the brand.

Dubbed “Panera RISE,” the strategy focuses on improving service efficiency, refreshing menu offerings, and expanding its restaurant footprint. The company is also committing to increased labor investment and upgrades to its dining room ambiance, aiming to enhance the overall customer experience.

While Panera’s potential IPO has been a frequent topic of discussion, Carbone emphasized that the company’s primary focus is on improving operational performance and successfully implementing the “Panera RISE” strategy. A successful turnaround would undoubtedly make Panera a more attractive IPO candidate.

Zillow has become synonymous with online real estate, significantly disrupting the traditional industry. The platform revolutionized how people search for homes and access real estate data, but its success has also attracted antitrust scrutiny.

_CNBC_