US Markets Plunge Post-After Hours: Software Stocks Plunge, Nasdaq Dips 1.4% Following Government Shutdown End and Geopolitical Tensions

[Para 1: The Lead] US markets closed lower on Tuesday, February 03, 2026, with software stocks suffering significant declines. The Nasdaq Composite Index fell 1.4%, and the S&P 500 dropped 0.9%. The Dow Jones Industrial Average closed down approximately 166 points, settling at 49,241.06 points. The market's downturn was exacerbated by geopolitical tensions, including the downing of an Iranian drone near a U.S. Navy aircraft carrier, which heightened uncertainty. [Para 2-3: Supporting details & Context] The U.S. House of Representatives passed a bill by a narrow margin of 217 to 214 on Tuesday, which President Trump immediately signed into law, ending a three-day government partial shutdown. This development provided a temporary relief to market concerns but did not prevent the broad market from experiencing a sell-off. Meanwhile, the U.S. manufacturing data's strong performance led to investors selling bonds, pushing up Treasury yields. Precious metals, after a historic decline, showed a notable rebound, with gold prices up over 6% and silver prices also recovering, providing some relief to market volatility. The focus of market attention also shifted to corporate earnings. Over a hundred S&P 500 companies are scheduled to report earnings this week, which could influence short-term market trends. Palantir, an AI-focused company, saw its stock surge 6.84% after reporting record revenue, indicating continued demand for AI solutions. Conversely, PayPal's stock was pressured due to earnings that missed expectations and the appointment of a new CEO. The market is also closely watching economic and policy variables. The delayed release of employment data due to the government shutdown adds uncertainty to economic prospects. Additionally, oil prices rose on geopolitical news, adding another layer of complexity to inflation and market dynamics.