5 things to know before the stock market opens on Wednesday

This is CNBC’s Morning Squawk newsletter. Subscribe here to receive future editions in your inbox.

Here are five important things investors need to know to start their trading day.

Shares sold off yesterday on investor concerns about the valuation of artificial intelligence companies. The losses were led by Palantirwhich fell 8% during the session despite Monday’s strong earnings report.

Here’s what you need to know:

Valuation concerns are nothing new for Palantir, which currently trades at a forward price-to-earnings ratio of 254. For comparison, Nvidia’s forward price/earnings ratio is 35. “Big Short” investor Michael Burry also disclosed his short position in the company, while Palantir CEO Alex Karp called the move “bat-crazy” and “market manipulation.” “The two companies he’s shorting are making all the money. It’s very strange,” Karp said on CNBC’s “Squawk Box” yesterday. Berry also bet NvidiaPalantir wasn’t the only big tech stock to take a hit in Tuesday’s trading, filings show. All members of the Magnificent Seven (excluding) apple The store closed in the red. advanced micro device Shares fell nearly 4% in after-hours trading after announcing third-quarter results last night. The company’s profits and sales beat analysts’ expectations, but its margin outlook only matched expectations.super micro Stock prices also fell by 10% after the bell. The server maker missed Wall Street’s expectations on both sales and bottom line results. Follow live market updates here.

It was a big night for Democrats, whose candidates swept key races in New York, New Jersey and Virginia.

NBC News reports that Zoran Mamdani, a self-proclaimed democratic socialist, will defeat former New York Governor Andrew Cuomo to become the next mayor of New York. More than 2 million New Yorkers turned out to vote in the election, the most since 1969, according to the city’s Board of Elections.

In New Jersey, Democrat Mikie Sherrill is expected to become the state’s next governor. Trump’s high-profile race against Republican Jack Ciattarelli was seen as a bellwether for Republicans to enter the state in 2024.

NBC News also predicts that Democrat Abigail Spanberger will become Virginia’s first female governor and that Democratic candidate Jay Jones will win the state’s attorney general race. Unlike Mamdani, Sherrill and Spanberger, Jones was not seen as a betting favorite heading into yesterday’s election.

mcdonalds Wall Street’s third-quarter sales and bottom line expectations this morning fell short. The fast food giant reported sales of $7.08 billion in the period, up 3% from a year ago but slightly below the $7.1 billion expected by analysts.

Despite the shorting, the company’s stock rose about 1% before the bell. In fact, the report wasn’t all bad. McDonald’s said same-store sales increased 3.6% globally and 2.4% in the United States, a result that CEO Chris Kempczinski called “a testament to our ability to achieve sustainable growth in a challenging environment.”

on the other hand, hippopotamus Shares fell nearly 8% in overnight trading after the fast-casual chain cut its full-year forecast for the second consecutive quarter.

A wave of layoffs is shaking American companies. Yesterday was IBM. Last week it was Amazon and Paramount. The previous week was Target and Meta.

While some have been quick to blame the rise of AI, experts say some companies may be using the new technology as a scapegoat for other problems or just plain cost-cutting, “AI-washing” their own savings. The situation is further muddied by a lack of employment data from the government due to the shutdown, raising concerns that the spate of cuts may have more to do with the economic slowdown than AI.

Job openings hit their lowest level in more than four years last month, according to Indeed data. The site’s job index, which uses February 2020 as the base value, fell to 101.9 in October, the lowest level since February 2021.

Netflix’s “KPop Demon Hunters” has taken pop culture by storm. The K-POP market is also moving.

The movie, which became Netflix’s most popular movie in August, has generated $10 billion in revenue for the K-pop music industry, CNBC’s Eunice Yun reported. The stock prices of South Korea’s so-called “big four” K-pop companies, HYBE, JYP Entertainment, SM Entertainment, and YG Entertainment, have increased by double digits this year.

But it’s not just the music. As Yun points out, the popularity of “KPop Demon Hunter” could spur increased consumption of cosmetics and food in South Korea, and could even have political repercussions in China.

rear Meta After investing $14.3 billion in Scale AI and firing its founder, the AI ​​startup’s future looked uncertain. However, Chief Financial Officer Dennis Cinelli dismissed the idea that the deal was an “acquisition” or licensing deal, insisting that Scale’s business was still growing. In his first public interview since joining the startup in 2022, he said:

—CNBC’s Sean Conlon, Pia Xin, Yun Li, John Meloy, Samantha Subin, Kavin Breuninger, Dan Mangan, Amelia Lucas, Gabrielle Fonrouge, Annie Palmer, Frank Holland, Jeff Cox, Eunice Yun and Ashley Caputo contributed to this report. Melody Warner edited this version.