Stocks declined due to concerns about the possibility of the Fed not reducing rates as much as anticipated. Palantir’s shares surged after beating fourth-quarter revenue expectations. Social media company Snap laid off 10% of its workforce. Here are the main news items for investors ahead of the trading day:The Dow Jones Industrial Average dropped over 250 points as worries arose that the Federal Reserve might not reduce rates as much as anticipated. The Dow fell 274.30 points, or 0.71%, while the S&P 500 retreated from its record high, dropping 0.32%, and the Nasdaq Composite slipped 0.2%. Concurrently, Treasury yields jumped over 13 basis points to reach 4.166% following strong economic data. For reference, the benchmark yield was around 3.81% last week. Looking ahead, Tuesday marks roughly the midpoint of the earnings season. For real-time market updates, follow live market updates.Alex Karp, CEO of Palantir Technologies, speaking at the World Economic Forum in Davos, Switzerland, Jan. 18, 2023.Arnd Wiegmann | ReutersPalantir’s shares surged over 17% in after-hours trading after the company reported its fourth-quarter earnings results. Palantir’s $608.4 million in revenue exceeded the forecast of $602.4 million by analysts polled by LSEG. The company, known for its defense and intelligence work with the U.S. government, is introducing an artificial intelligence platform. CEO Alex Karp expressed optimism about the initiative, stating that the company’s expansion and growth “have never been greater,” and the demand for large language models “continues to be unrelenting.”The Snapchat application on a smartphone arranged in Hastings-on-Hudson, New York, US, on Wednesday, Feb. 1, 2023.Tiffany Hagler-Geard | Bloomberg | Getty ImagesSnap is the latest tech company to implement layoffs in 2024. The social media company announced on Monday that it would reduce its workforce by 10%, or approximately 500 employees. The company cited the promotion of in-person collaboration as one reason for the move. This is not the first time Snap has conducted layoffs, having done so multiple times since 2022, including a 20% reduction in staff in August 2022. In January alone, tech companies cut nearly 24,000 jobs.A ‘For Sale’ sign is posted in front of a single family home on October 27, 2022 in Hollywood, Florida.Joe Raedle | Getty ImagesThe average rate on the 30-year fixed mortgage reached 7.04% on Monday. This is the first instance of rates surpassing 7% since December and follows stronger-than-expected January jobs and manufacturing reports. Mortgage rates have been fluctuating recently, briefly exceeding 8% in October for the first time in 20 years before decreasing again. Although mortgage rates do not follow the Fed, they generally move in line with the 10-year Treasury yield, which can be strongly influenced by Fed statements. Spring is a crucial period for the housing market, making rates more vital amid high and continuously rising home prices.People sat at McDonald’s outdoor seating after a Saturday night out on Rothschild Street on June 11, 2022 in Tel Aviv, Israel. Alexi Rosenfeld | Getty ImagesBoth Starbucks and McDonald’s reported a negative impact on their sales from the Israel-Hamas conflict. These two major American restaurant chains also anticipated continued demand challenges in the coming quarters due to the conflict. Starbucks announced its earnings last Tuesday and has seen its stock decline by approximately 2% since then. It faced boycotts from conservatives after its workers’ union expressed support for Palestinians, from which Starbucks sought to distance itself. Additionally, sales in the Middle East declined. Meanwhile, McDonald’s stock dropped nearly 4% on Monday. The burger chain encountered boycotts from predominantly Muslim countries and saw weaker sales in the Middle East after its Israeli licensee offered discounts to soldiers.— CNBC’s Samantha Subin, Hakyung Kim, Ashley Capoot, Rohan Goswami, Diana Olick, and Amelia Lucas contributed to this report.— Follow broader market action like a pro on CNBC Pro.
