Stocks fell broadly on Tuesday as investors rotated out of technology names into defensive companies set to benefit from U.S. economic growth. The partial-U.S. government shutdown also continued to hamper market sentiment.
The Dow Jones Industrial Average (NYSE: DIA) lost over 160 points to settle at 49,240.99 on Tuesday, while the broader market S&P 500 Index (NYSE: SPY) and tech-heavy Nasdaq Composite (NASDAQ: QQQ) lost about 1% and 1.4% to respectively end the session at 6,917.81 and 23,255.18.
Earnings reports dominated headlines on Tuesday, with Palantir Technologies (NASDAQ: PLTR) posting a strong fourth-quarter, giving a boost to artificial intelligence-related sentiment. The defense software provider said it expects $1.532 billion to $1.536 billion in first-quarter revenue and up to $7.198 billion in revenue for its full-year -- each topping analyst expectations.
Chief Executive Officer Alex Karp called the company's earnings "indisputably the best results that I'm aware of in tech in the last decade," in an interview with CNBC, adding that demand for its products in the United States is so strong that it has paused selling to the nation's allies.
PepsiCo (NASDAQ: PEP) also reported better-than-expected fourth-quarter earnings on Tuesday, driven by improving organic sales across its business. The snack and beverage giant also signaled it would lower prices on food products in its North American division to "improve competitiveness and the purchase frequency of our brands," according to a prepared statement from company executives.
Jefferies analyst Corey Tarlowe called PepsiCo's move "one of the clearest indications yet" that packaged food companies will be adapting consumer trends by making products more affordable.
"After several years of cumulative price inflation that lifted salty-snack prices ~38% from 2020 to 2024, we view this as the beginning, not the end, of branded price normalization, as manufacturers face slowing volumes, consumer pushback and intensifying competition from private-label alternatives." Tarlowe wrote, adding that this environment favors other companies like Walmart (NYSE: WMT) due to its price leadership and large market share.
Walmart was in the news Tuesday after the retailer surpassed the $1 trillion market cap threshold, joining tech companies such as Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) in the exclusive club. The company's stock has risen more than 28% in the past year, and over 14% so far in 2026.
Late Tuesday, the House of Representatives narrowly passed a bill to end the three-day partial government shutdown, in a vote of 217-215 mostly along party lines. The bill contains measures to fund the departments of Defense, Treasury, State, Health and Human Services, Labor, Housing and Urban Development, Transportation, and Education through the remainder of the fiscal year on Sept. 30.
For Wednesday, market participants will tune in to earnings reports from companies including Advanced Micro Devices (NASDAQ: AMD), Chipotle Mexican Grill (NASDAQ: CMG), Uber (NYSE: UBER), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).