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US equities moved lower on Tuesday as investors weighed earnings against a partial US government shutdown that has delayed key economic releases. The S&P 500 fell 0.5% by 10:42 a.m. in New York, while the tech-heavy NASDAQ 100 dropped 1.2%. Meanwhile, the Dow Jones Industrial Average held close to unchanged.
A partial government shutdown has pushed the market’s attention toward company results, after officials delayed scheduled releases, including the US employment report. This delay reduced fresh macro signals for short-term positioning.
As a result, earnings season headlines moved indexes more than usual. “The absence of the US jobs report shifts the focus solely onto earnings for US traders,” said Joshua Mahony, chief market analyst at Scope Markets.
Sector rotation also influenced the major US gauges during the session. The Russell 2000 rose 0.7% as investors favored economically sensitive stocks. In contrast, large-cap growth names pulled the broader indexes lower.
Market participants also weighed leadership changes within the S&P 500. Investors have questioned some artificial-intelligence beneficiaries since the last reporting cycle. Higher costs and uncertain profitability have added pressure on valuations.
Semiconductor shares weakened and dragged on the technology-heavy index. The Philadelphia Stock Exchange Semiconductor Index fell 1.9% during the session. The move helped explain the steeper decline in the NASDAQ 100.
Investors also watched for after-hours results from Advanced Micro Devices Inc. and Amgen Inc. Traders viewed those reports as important updates for AI-linked demand and margins. However, selling pressure in chips showed up before those releases arrived.
Software and data-services stocks faced heavy selling after Anthropic released a productivity tool for in-house lawyers. The tool was described as automating tasks like contract review and legal briefings. The release sharpened investor concerns about competitive pressure across legal publishing and analytics.
Selling spread quickly across exposed firms with similar revenue models. London Stock Exchange Group Plc fell as much as 10% during the slide. Thomson Reuters Corp. plunged as much as 17% in early trading. CS Disco Inc. sank as much as 14%, while LegalZoom.com Inc. declined about 16%.
European-listed analytics providers also dropped sharply. RELX Plc and Wolters Kluwer NV fell more than 10% during the session. Experian Plc slid about 7% as the sell-off broadened.
The earnings backdrop within software has also looked less supportive than usual. According to reports, only 67% to 71% of software companies in the S&P 500 beat revenue expectations, compared with approximately 83% to 85% across the broader technology sector using the same dataset.
Most software companies beat earnings expectations. However, that did not prevent declines because investors focused on long-term prospects.
The market reaction reflected a specific fear about business models under AI. Investors worry about more competition and greater pricing pressure over time. They also worry that software “moats” look thinner under faster automation.
Walmart crossed a $1 trillion valuation milestone during the session.
Palantir rose 6.6% after forecasting fiscal 2026 revenue above expectations.
PayPal sank 18% after naming HP chief Enrique Lores as chief executive.
Archer-Daniels-Midland fell 3.7% after issuing a weaker profit outlook.
Pfizer dropped after obesity-treatment data underwhelmed investors and traders.
Walt Disney said Josh D’Amaro will succeed Bob Iger as chief executive.
Teradyne forecasted first-quarter revenue above the average analyst estimate.
Rambus fell after analysts flagged a supply chain hiccup in its outlook.
Oracle drew attention after record demand for a $25 billion bond sale.
Siemens Energy said it will invest $1 billion in US manufacturing capacity.
Elon Musk combined SpaceX and xAI in a deal valuing the enlarged entity at $1.25 trillion.
Three forces drove index moves more than broad macro data on Tuesday. First, the shutdown delayed the jobs report and kept attention on earnings season. Second, semiconductor stocks fell and weighed on the NASDAQ 100’s performance. Third, AI disruption fears triggered sharp declines in software and data services.
Earnings updates and guidance will likely remain the main market driver while data stays delayed. Moreover, sector rotation may persist as investors weigh AI winners against potential disruption risks.
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