5 things to know before the stock market opens Wednesday

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Here are five key things investors need to know to start the trading day:

Stocks sold off yesterday amid investor concerns about the valuations of artificial intelligence companies. Leading the losses were shares of Palantir, which dropped 8% in the session despite a positive earnings report on Monday.

Here’s what to know:

The valuation concerns are not new for Palantir, which currently has a forward price-to-earnings ratio of 254. For comparison, Nvidia has a forward price-to-earnings ratio of 35.”Big Short” investor Michael Burry also revealed a short position in the company, a move Palantir CEO Alex Karp called “bats— crazy” and “market manipulation.””The two companies he’s shorting are the ones making all the money, which is super weird,” Karp told CNBC’s “Squawk Box” yesterday. Burry also bet against Nvidia, a filing showed.Palantir wasn’t the only big tech stock to suffer in Tuesday’s session. Every member of the Magnificent Seven except for Apple closed in the red.Shares of Advanced Micro Devices dropped nearly 4% in extended trading after reporting third-quarter results last night. The chipmaker beat analysts’ earnings and revenue expectations, but its margin guidance was only inline with estimates.Super Micro shares also sank as much as 10% after the bell. The server maker missed Wall Street’s expectations on both the top and bottom lines.Follow live market updates here.

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

Self-described democratic socialist Zohran Mamdani will become the next mayor of New York City, NBC News projects, defeating former New York Gov. Andrew Cuomo. 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 projected to become the state’s next governor. The closely watched race against Trump-endorsed Republican Jack Ciattarelli was seen as a bellwether for the GOP, which made inroads in the state in 2024.

NBC News also projects Democrat Abigail Spanberger will become the first female governor of Virginia and Democratic nominee Jay Jones will win the state’s attorney general race. Unlike Mamdani, Sherril and Spanberger, Jones was not seen as the betting favorite going into yesterday’s election.

McDonald’s missed Wall Street’s third-quarter expectations on the top and bottom lines this morning. The fast-food giant reported $7.08 billion in revenue during the period — a 3% increase from a year ago, but slightly below analysts’ $7.1 billion estimate.

Despite coming up short, the company’s shares rose about 1% before the bell. Indeed, the report wasn’t all bad: McDonald’s said same-store sales grew 3.6% globally and 2.4% in the U.S. CEO Chris Kempczinski called the results “a testament to our ability to deliver sustainable growth even in a challenging environment.”

Meanwhile, shares of Cava sank nearly 8% in overnight trading after the fast-casual chain cut its full-year forecast for the second straight quarter.

A wave of layoffs is rattling corporate America. Yesterday it was IBM. Last week, it was Amazon and Paramount. The week before, Target and Meta.

And while some rush to say the rise of AI is to blame, experts say some companies could be “AI-washing” their cuts, using the new tech as a scapegoat for other issues or run-of-the-mill cost-cutting. A lack of employment data from the government, thanks to the shutdown, makes the picture even murkier, bringing about concerns that the spate of cuts could have more to do with a slowing economy than with AI.

Job openings hit their lowest level in more than four years last month, according to data from Indeed. The site’s Job Posting Index, which uses February 2020 as a baseline, fell to 101.9 in October — its lowest level since February 2021.

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

The film, which in August became Netflix’s most popular movie ever, has generated $10 billion for the K-pop music industry, CNBC’s Eunice Yoon reports. Shares of HYBE, JYP Entertainment, SM Entertainment and YG Entertainment — the so-called “Big Four” K-pop companies in South Korea — have seen double-digit gains this year.

But it’s not just music. As Yoon notes, the popularity of “KPop Demon Hunters” could also spur increased consumption of Korean cosmetics and foods, and could even have political ramifications in China.

After Meta invested $14.3 billion into Scale AI and hired away its founder, the future looked uncertain for the AI startup. But CFO Dennis Cinelli rejected the notion that the deal was an “acquihire” or licensing deal, and insisted Scale’s business is still growing. Here’s how he put it, in his first public interview since joining the startup in 2022:

— CNBC’s Sean Conlon, Pia Singh, Yun Li, John Melloy, Samantha Subin, Kevin Breuninger, Dan Mangan, Amelia Lucas, Gabrielle Fonrouge, Annie Palmer, Frank Holland, Jeff Cox, Eunice Yoon and Ashley Capoot contributed to this report. Melodie Warner edited this edition.