The FTSE 100 (^FTSE) and European stocks slumped on Monday, as a fresh batch of quarterly earnings left investors calculating bets on sky-high valuations, with doubts creeping in. Meanwhile, Wall Street is getting nervous that companies aren’t performing well enough to justify their high-riding market valuations, prompting big bank CEOs to flag a likely correction ahead.

Palantir (PLTR) shares dropped more than 6.8% despite solid quarterly results as analysts questioned the stock’s lofty price-to-earnings ratio.

Wall Street is getting nervous that companies aren’t performing well enough to justify their high-riding market valuations, prompting big bank CEOs to flag a likely correction ahead.

Meanwhile in the UK, Rachel Reeves made a pre-budget speech in an effort to manage expectations about new fiscal policy.

The next raft of economic changes from the chancellor, set for 26 November, is now expected to include provisions that could increase taxes — a move which may breach manifesto commitments which the Labour party was elected on.

“I understand that – these are important choices that will shape our economy for years to come,” Reeves said in a broadcast on Tuesday morning.

Read more: Rachel Reeves likely to need £26bn of tax rises in budget, think-tank warns

“But it is important that people understand the circumstances we are facing, the principles guiding my choices – and why I believe they will be the right choices for the country.”

When questioned, Reeves refused to rule out tax rises. “As chancellor, I have to face the world as it is, not the world that I want it to be,” she said.

Labour pledged not to hike income tax, VAT or national insurance in its general election manifesto. No chancellor has increased the basic rate in 50 years and it would be a risk politically.

Reeves said she would stand by her fiscal rules but would have to increase the economic headroom for the government.

Her comments came a day after prime minister Keir Starmer said that there are “hard and serious choices ahead”.

  • The FTSE 100 had fallen 0.4% by the time markets opened in the US. Mining stocks Antofagasta (ANTO.L), Fresnillo (FRES.L) and Anglo American (AAL.L) were among the biggest losers, dragging down the index

  • The DAX (^GDAXI) in Germany dropped 1.1%

  • Over in Paris, the CAC 40 (^FCHI) lost 0.9%

  • The pan-European STOXX 600 (^STOXX) pulled 0.8% lower

  • The pound lost 0.8% against the dollar (GBPUSD=X) dipping below the $1.31 mark

  • The tech-heavy Nasdaq Composite (^IXIC) index led losses in the US, sinking by more than 1.4%, while the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) sank by more than 1.1% and more than 0.8%, respectively

LIVE 15 updates

  • Concerns about OPEC roil oil, gold and silver

    Axel Rudolph, Senior Technical Analyst at investing and trading platform IG, said:

  • Major cryptos sell off with stock market

    Bitcoin looked close to breaking below $100,000 on Tuesday, having lost more than 14% of its value over the past calendar month.

  • How US stocks are faring at the opening bell
  • Here’s how BP shares are performing this afternoon
  • BP tops third quarter profit estimates and announces $750m share buyback

    Vicky McKeever writes:

    Oil major BP (BP.L) beat profit estimates in the third quarter and announced another share buyback worth $750m (£571m).

    The company posted underlying replacement cost profit – its preferred measure for net income – of $2.21bn in the third quarter, which was lower than the $2.35bn reported in the previous quarter and down from $2.27bn for the same period last year. However, this figure topped expectations of $2.02bn, according to consensus figures provided by BP.

    Profit attributable to BP shareholders came in at $1.16bn for the third quarter, which was down from $1.62bn in the second quarter but higher than the $206m reported last year.

    The company said it intended to execute another $750m in share buybacks prior to fourth quarter results, having announced a repurchase of the same value in the second quarter. BP announced a dividend of 8.32 cents for the third quarter, which was the same as the previous three months but up from 8 cents for the same period last year.

    Despite a strong set of results, shares in FTSE 100-listed (^FTSE) BP were trading just below the flatline in early trading on Tuesday, though the stock is currently up nearly 14% year-to-date.

    Read more on Yahoo Finance

  • Uber stock pulls lower despite strong earnings

    Uber (UBER) reported strong third quarter results before the bell on Tuesday, but investors likely wanted more, sending the stock lower in pre-market trade. The results follow a wave of deals Uber has made in the autonomous space.

    Uber reported Q3 revenue of $13.47bn vs $13.26bn estimated per Bloomberg consensus, a 21% jump from a year ago. Uber posted earnings per share (EPS) of $1.20 vs $0.70, with adjusted EBITDA coming in at $2.3bn vs $2.27bn, up 33%. Net income jumped to $6.6bn, however $4.9bn of that was due to a tax valuation benefit, not operations.

    Uber’s Q3 monthly active platform consumers (MAPCs) hit 189 million vs. 184.1 million expected, up 17% year over year and topping estimates. Gross bookings jumped 21% to $48.7bn, also better than the $48.96bn expected.

    Looking ahead, Uber said it projects Q4 gross bookings of $52.25 billion to $53.75bn vs $52.33bn estimated, and adjusted EBITDA of $2.41bn to $2.51bn vs $2.49n expected.

    Read more on Yahoo Finance

  • AB Foods mulls spinning off Primark

    The owner of Primark has said it is considering spinning off the retail chain from its food business as it also revealed a drop in annual profits.

    Associated British Foods (AB Foods) announced a review of the structure of the group alongside its full-year financial results.

    It told investors that no decision had been made but its review may result in the board deciding to separate Primark from the food business.

    This would see the retailer listed separately on the London Stock Exchange but retaining the majority ownership of Wittington Investments, the investment vehicle for the Weston family.

    AB Foods also operates a grocery business, which includes brands Kingsmill, Blue Dragon, Jordans, Twinings and Ryvita, as well as an ingredients arm.

    George Weston, the company’s chief executive, said the “size and complexity of Primark” means it may need a separate leadership to oversee the retailer.

    “I’ve believed for some while that the food company is not well understood and under-appreciated and if we separated it, it would give us the opportunity to explain it much better,” he told the PA news agency.

    “If the split did go ahead, I would hope to be chief executive of the food group.”

  • Palantir shares slip

    Shares in Palantir (PLTR) slipped in pre-market trading on Tuesday morning, despite the company’s strong quarterly performance, as investors fretted over the data analytics group’s steep valuation, which stands at roughly 255 times forward earnings.

    The data intelligence company reported third-quarter revenue of $1.18bn (£901m), a 63% increase from a year earlier, while net income rose to $476m, or 18 cents per share, up from $143.5m, or 6 cents per share, in the same period last year.

    Dan Coatsworth, head of markets at AJ Bell, said:

  • Pound dips and gilts wobble

    Neil Wilson, UK investor strategist at Saxo Markets, said:

  • Reeves may need £26bn tax rise

    Chancellor Rachel Reeves will likely need to announce £26bn in tax rises in her upcoming autumn budget to put the UK’s public finances in order, the Resolution Foundation has warned.

    The think-tank said on Tuesday that its autumn budget preview highlighted that an anticipated downgrade to the UK’s “trend” productivity growth is “likely to be large at nearly 0.3 percentage points”.

    This refers to the five-year forecasts for the UK economy and public finances, provided by the Office for Budget Responsibility (OBR) alongside the budget, which Reeves is due to deliver on 26 November.

    The Resolution Foundation said that given that productivity growth is weak in the near-term, the hit to public finances would be confined to the back end of the five-year forecast period, with the expectation that borrowing will increase by around £14bn in 2029/30. Higher borrowing costs are set to add a further £6bn to borrowing, the think-tank said, along with £7bn from policy U-turns since March.

    At the same time, the Resolution Foundation said that changes to the economic outlook could offer some relief to the chancellor. For instance, the think-tank said that a “stronger outlook for pay could offset almost all the fiscal pain from lower productivity and reduce borrowing by £13bn”.

    Read more on Yahoo Finance UK

  • Reeves speech on deck

    Rachel Reeves just spoke from Downing Street, answering reporters questions. She said:

    The government is “focused entirely on the priorities of the British people”.

    Principles include protecting the NHS and improving the cost of living.

    She said the government is in a difficult situation because of:

    • Continual threat of global tariffs and inflation slow to come down

    • Cost of government borrowing has increased around the world

    • Commitment to reforming welfare state costs money

  • US stock futures fall

    US stock futures dropped Tuesday morning after a mixed session on Wall Street that saw AI optimism in megacap companies drive the S&P 500 and Nasdaq Composite higher.

    Dow Jones Industrial Average futures (YM=F) lost 0.5%. S&P 500 futures (ES=F) slid down 0.8% and Nasdaq 100 futures (NQ=F) dropped 1.1%.

    AI-heavy tech names once again fueled gains on Monday. Amazon notched a record close after announcing a new partnership with OpenAI, helping the Nasdaq (^IXIC) advance nearly 0.5%. The S&P 500 (^GSPC) rose roughly 0.2%, while the Dow (^DJI) fell about 0.5%.

    Strong Q3 results and elevated AI spending from major cloud players continue to underpin investor confidence. The “Magnificent Seven” stocks remain market drivers, though their performance has grown uneven with the indexes they are part of as an increasing amount of companies from major gauges are reporting in the red.

  • Good morning!

    Hi! Lucy Harley-McKeown here. We’re gearing up for another day of markets news — and to watch chancellor Rachel Reeves give an unprecedented speech ahead of the budget on tax rises.

    Reeves will begin speaking at 10am UK time, for around 25 minutes, as discontent brews in Westminster about a potential manifesto breach on income tax.

    Also on the slate:

    • The Bank of England’s Sarah Breeden sits down for a fireside chat at Santander International banking conference on ‘Financial stability and growth in the UK’, at 11:40am, in Madrid.

    • US JOLTS jobs numbers are slated — but look likely to be postponed or cancelled due to the US government shutdown.

    • An interest rate decision by the Bank of Australia.

    Earnings-wise:

    UK: Associated British Foods, BP (BP.L) and Domino’s Pizza (DOM.L)

    Europe: Ferrari (RACE.MI)

    US: Electronic Arts (EA), AMD (AMD), Spotify (SPOT), Pfizer (PFE), Apollo Global Management (APO), Super Micro Computer (SMCI), Uber (UBER), Marriott International (MAR), Match Group (MTCH)

    Japan: Nintendo (NTO.SG)

    Asia/Saudi: Aramco (2222.SR)