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Futures down: Dow 0.09%, S&P 500 0.4%, Nasdaq 0.6%

Nov 5 (Reuters) - Nasdaq and S&P 500 futures ticked

lower on Wednesday, as investors retreated from AI-linked stocks

for a second day on concerns over ballooning valuations and

awaited economic data for signs on the health of the U.S. labor

market.

However, futures pointed to less severe losses at market

open compared with Tuesday when the Nasdaq tumbled 2% to

post its biggest one-day loss in nearly a month.

At 06:10 a.m. ET, Dow E-minis were down 43 points,

or 0.09%, S&P 500 E-minis were down 25.5 points, or

0.37%, and Nasdaq 100 E-minis were down 149.5 points, or

0.58%

U.S. stocks were trading at all-time highs in late October

before warnings of a market pullback by U.S. bank CEOs and

bearish views from hedge funds on the AI trade prompted concerns

of a bubble.

"The problem with high valuations is that it's like blue

sky. The moment there's one small black cloud, it is not a blue

sky anymore. So if you have very high valuations, small news,

shifts in sentiment can actually cause markets to come down a

lot," said Herald Van der Linde, head of equity strategy for

Asia Pacific at HSBC.

The benchmark S&P 500 has recently traded at 23.3

times forward earnings, the highest since the start of the

century and well above its 20-year average of 16, according to

LSEG data.

Shares of Advanced Micro Devices ( AMD ), which have more

than doubled this year, dipped 4.9% premarket. Super Micro

Computer ( SMCI ), also an AI player, slumped 9% after the

server maker posted quarterly profit and revenue below Wall

Street estimates.

Shares of other big chip companies Nvidia ( NVDA ), Broadcom ( AVGO )

and Intel ( INTC ) also fell.

The third-quarter earnings season is well underway and

traders will keep an eye on big names reporting on Wednesday

including Qualcomm ( QCOM ), Humana and McDonald's

.

There was little reaction in stocks after democratic

socialist Zohran Mamdani was elected as mayor of New York City.

GOVT SHUTDOWN SETS RECORD

With the U.S. government shutdown becoming the longest in

history, the spotlight will be on ADP National Employment

numbers due later in the day to gauge the state of the labor

market.

October employment figures are expected to show an addition

of 28,000 jobs, compared with the prior month's decrease of

32,000 positions.

The data fog has led to debate among Federal Reserve

officials over the monetary policy path and diverging opinions

on how best to handle the gap.

Also on deck will be a Supreme Court hearing on the legality

of U.S. President Donald Trump's tariffs, after a lower court

ruled the administration had overstepped authority by imposing

levies under an emergency law.

China said it would suspend retaliatory tariffs on U.S.

imports following last week's meeting between the countries'

leaders, while 10% levies would be maintained with imports of

U.S. soybeans facing a 13% rate.

Before the bell, Eli Lilly ( LLY ) shares gained 1.7%. The

company's Danish rival Novo Nordisk lowered its fiscal-year

profit and sales forecast.

Pinterest ( PINS ) shares dropped 17.2% after the

image-sharing platform forecast fourth-quarter revenue below

expectations.