Airbnb shares fell 13% in after-hours trading on Tuesday after the company's third quarter revenue guidance missed expectations.

The company said it sees revenue coming in between $3.67 billion and $3.73 billion in the current quarter, below estimates of $3.84 billion.

Revenue came in slightly above expectations of $2.74 billion to hit $2.75 billion, representing an 11% year-over-year increase. Adjusted EBITDA also beat expectations, rising 9.2% year over year to hit $894 million.

The company also beat on nights and experiences booked, gross booking value per nights and experiences booked, and free cash flow.

Airbnb said Latin America and Asia Pacific continue to be its fastest-growing regions, while it is seeing shorter booking lead times globally and signs of slowing demand from US guests.

US stocks closed in a sea of green on Tuesday, snapping a three-day market rout as investors reassessed the health of the US economy and the path forward for interest rates.

The benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) led the day's session, each rising about 1%. The Dow Jones Industrial Average (^DJI) closed up about 0.8%, or roughly 300 points.

Here are some stocks trending on the Yahoo Finance homepage in late afternoon trading after a rally day on Wall Street:

Lumen (LUMN): The telecom provider saw shares soar 85% after it announced $5 billion in new business deals due to increasing demand for artificial intelligence connectivity. The company said it's also negotiating with customers to secure another $7 billion in sales opportunities to meet growing customer needs.

Uber (UBER): Shares of the ride-hailing giant rose 11% after the company beat earnings expectations on both the top and bottom lines. It was the sixth consecutive quarter of trip growth above 20%, alongside record profitability.

Palantir (PLTR): Similar to Uber, Palantir saw shares rise about 11% on positive earnings results, with the AI software player also lifting its full-year revenue forecast for the second time this year. The company now expects revenue between $2.74 billion and $2.75 billion, up from the prior $2.68 billion to $2.69 billion.

The market's response to the weak July jobs report has fueled concerns the Federal Reserve made a mistake holding rates at a 23-year high.

And now, talk in some corners of the investment world has shifted from the timing of rate cuts to the timing of a recession hitting the US economy.

But in an interview on Tuesday, Apollo Global Management chief economist Torsten Sløk told Yahoo Finance the market is "pricing in too many cuts." (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

Investors quickly moved to price in more than four interest rate cuts in 2024 after Friday's jobs report, up from the three seen after the Fed's meeting on July 31. Some market commentators have even suggested the Fed should cut before its September.

Sløk added that given the volatile swings seen in market bets on Fed cuts over the past several trading sessions, investors should be taking what the market is projecting with a "grain of salt."

Sløk pointed to data showing consumers still spending on activities like flights, dining out, and hotel stays to make the case that the consumer is showing few signs of pulling back at this point.

"Across the board, there is just not much evidence of the economy either being in a recession or being on its road to entering a recession," Sløk said.

Part of Yahoo Finance's interview wih Sløk is below.

Disney (DIS) will report its fiscal third quarter earnings before the bell on Wednesday as the company attempts to reach sustained profitability in its streaming division and also stabilize demand within its parks business.

As a reminder, Disney recently adjusted its reporting structure after CEO Bob Iger reorganized the company into three core business segments: Disney Entertainment, which includes its entire media and streaming portfolio; Experiences, which encompasses the parks business; and Sports, which includes ESPN networks and ESPN+.

Over the past year, Disney has been grappling with challenges that include a declining linear TV business, slower growth in its parks business, and profitability hurdles in streaming.

Disney CEO Bob Iger has attempted to reset the company with an aggressive turnaround plan and recently emerged victorious from a high-profile proxy fight against activist investor Nelson Peltz. But investors have been cautious as of late with shares reversing prior gains to fall more than 20% over the last three months.

Here's how Wall Street expects Disney to perform, according to consensus estimates compiled by Bloomberg:

• Total revenue: $23.08 billion versus $22.33 in Q3 2023

• Adj. earnings per share: $1.19 versus $1.03 in Q3 2023

• Entertainment revenue: $10.37 billion

• Sports revenue: $4.40 billion

• Experiences revenue: $8.61 billion

• Disney+ subscriber: 154.55 million versus 146.10 million in Q3 2023

Guidance will be closely watched after last quarter's disappointing forecast led to concerns over the company's long-term outlook.

In May, Disney said an important part of its streaming business turned a profit for the first time but that it expects weaker results in that segment for the third quarter, highlighting the challenges in achieving sustained streaming profitability, a key priority as its linear TV business declines.

On Tuesday, the company announced price hikes will once again hit its various streaming services as it races toward profitability. The monthly cost of the Disney+ ad tier will rise by $2 to $9.99, while the ad-free version will also tick higher by $2 to hit $15.99.

Similarly, Hulu's ad-supported tier will rise by $2 to $9.99 per month, with the ad-free version rising by $1 to $18.99. The Disney Bundle will offer ad tiers of Disney+ and Hulu for $10.99 per month, up $1 from its previous price and an overall more attractive offering compared to the individual plans.

ESPN+ and Hulu with Live TV will tick up by $1 and $6, respectively, to a monthly cost of $11.99 for ESPN+ and $82.99 for the ad-supported version of Hulu with Live TV. The ad-free version will now cost $95.99 a month.

The price changes are set to go into effect on Oct. 17. Disney expects full streaming profitability by the fourth quarter of this year.

Read more about what to expect from Disney's earnings here.

Embrace the volatility. That’s one way to interpret the three-day rout that trampled a healthy chunk of this year’s market gains.

Even as Tuesday’s rebound appeared to quiet the panic that set in during Monday’s wipeout, some analysts see a bumpy road ahead, owing in part to factors outside of the financial world.

Wall Street’s “fear gauge” — the CBOE Volatility Index (^VIX) — touched its highest level since the early days of the COVID-19 pandemic on Monday. On Tuesday afternoon it returned to levels seen often in 2022.

“Prior presidential election years have seen the VIX increase by about 25% from July-November in tandem with rising policy uncertainty,” wrote Bank of America Global Research strategists in a note sent out on Tuesday.

But investors can take heart in the relationship between the VIX and stocks with muscular earnings and dividend stability. “The best hedge is owning high quality stocks,” the strategists said.

“Market tranches based on quality have a well-behaved relationship with the VIX — the highest quality stocks tend to outperform as the VIX rises while the lowest quality stocks tend to lag the most.”

What’s more, the strategists said pullbacks of this magnitude — the S&P has shed close to 7% of its value since a July 16 high — are not unusual. Since the 1930s, pullbacks of 5% or more have occurred three times per year on average, they said, with larger corrections of 10% or higher typically occurring once a year.

“We are effectively due, as we last saw a correction in fall 2023.”

Artificial intelligence stocks, a hallmark of the recent bull market run, have lost steam over the past month.

Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOGL,GOOG), and Amazon (AMZN) are all down more than 15% over the period amid a broader market sell-off that's seen the Nasdaq Composite (^IXIC) decline more than 10% and the S&P 500 (^GSPC) slide more than 8%. Even as investors have begun to question recent earnings results from the group, some strategists don't think this is the end of the AI run.

"We keep our overweight to U.S. equities, driven by the AI mega force, and see the selloff presenting buying opportunities," BlackRock Investment Institute wrote in a research note Monday night.

Recession fears have driven the market lower as investors speculate over whether the Federal Reserve is keeping monetary policy too restrictive. BlackRock describes these concerns as "overdone."

"We think growth will be supportive of risk assets and believe markets are pricing in too many Fed rate cuts," the team wrote.

Evercore ISI's Julian Emanuel, who holds the most bullish year-end S&P 500 target on Wall Street at 6,000, isn't backing down either. In a note to clients on Monday, Emanuel noted that the recent spike in the CBOE Volatility Index (^VIX) provides the opportunity for "patient buying." Quick spikes in volatility, as seen on Monday, usually end with stocks higher a year later, per Emanuel.

He likens the current moment to the large drawdowns seen in tech stocks during the "1994-99 Boom bull market."

"The rationale for AI, in a world where the global workforce is aging rapidly and efficiency will be critical to drive productivity enhancements, is greater than ever," Emanuel wrote. "We view the current 'AI Air Pocket' as an opportunity to gain exposure to a long term secular theme."

Read more here.

Technology led the stock market's rally on Tuesday, with the sector surging 2.1%, followed by Real Estate, Financials, and Communication Services.

The energy sector climbed about 0.8% as crude oil rebounded from its recent rout, rising about 0.2% to trade above $73 a barrel. Brent traded flat to hover above $76 a barrel.

Tuesday's market action is quite the reversal from the severe unwinding seen on Monday, with the S&P 500 (^GSPC) only down 8% from its mid-July record high.

Stocks bounced back on Tuesday as investors assessed recession fears following Friday's weak jobs data, coupled with disappointing earnings from Big Tech and a surprise interest rate hike from the Bank of Japan.

But Wall Street strategists say the intense market reaction has been overblown.

Aggressive concerns about a recession "were very much overdone," Seema Shah, chief global strategist at Principal Asset Management, told Yahoo Finance. "What you're seeing now is a little bit of a reality check that maybe the economy concerns are not as bad as had been expected, but you do still have some of the technicals unwinding."

Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, added he does not think the US economy will fall into a recession and also doesn't believe that the Fed is "behind the eight ball."

"The carry trade unwind probably had something to do with it, but really the fear that gripped the market after last Friday's report was that we were going to have a recession."

Wren said he expects the economy to slow in the next few quarters but that growth will "probably improve in the second half of next year."

In response to the latest action, markets have quickly recalibrated the chances of more rate cuts to come this year. As of Tuesday morning, markets are pricing in a roughly 95% chance of a 50-basis-point interest rate cut by the end of the Fed's September meeting, up from a 13% chance a week prior, per the CME FedWatch Tool.

US stocks are eyeing a comeback with all three major indexes opening in the green Tuesday. The moves follow a steep three-day rout that eliminated a significant portion of year-to-date market gains.

The tech-heavy Nasdaq Composite (^IXIC) and benchmark S&P 500 (^GSPC) led the day's gains, opening about 0.6% and 0.5% higher, respectively. The Dow Jones Industrial Average (^DJI) traded just above the flatline.

In other positive market signs, Wall Street's "fear gauge" — the CBOE Volatility Index (^VIX) — fell back to levels seen often in 2022 after it touched its highest level since the early days of the COVID-19 pandemic on Monday.

The mindset of Wall Street generally cracks me up.

On Monday as the market was melting down, pundits were all but predicting a fourth quarter recession and the onset of a bear market. Today, I awake to read many of these same pundits talking about calm returning to markets!

The reality is that when the Dow drops more than 1,000 points in a single session (as it did on Monday, in case you forgot already) it suggests broken confidence. And that confidence isn't repaired overnight — it takes time and wild short-term swings in stocks. So be patient here and question anyone saying the coast is clear.

To that end, I liked what the JPMorgan team put out this morning in terms of a guide for assessing a potential market bottom:

"We currently don’t have the full set of ingredients of a market bottom, such as the slope of the 20-day moving average flattening, market breadth hitting and bouncing off lows, positioning and sentiment washout, convincing highs in the put/call ratio, coming out of VIX inversion, etc. There is good reason to worry about this correction, as unemployment bottoming off cycle lows has historically led to recession, while the previous market assumption was that the unemployment rate uptick reflected labor supply normalization. In equities, we see the position-heavy reversal of momentum trades and defensive leadership signaling worries about growth risk."

Alphabet (GOOGL) shares are hanging in there after a legal blow late Monday.

A judge found the company's search and ad businesses violated antitrust law. More analysis from Yahoo Finance's Alexis Keenan and Dan Howley here.

Wall Street mostly appears to be taking the news in stride — no downgrades or estimate cuts this morning.

But, I do think RBC analyst Brad Erickson brings up key points for those longer-term investors in the stock:

"Whatever multiple an investor was thought to be paying for the search business, we'd think that value would likely have to be discounted by some amount given the implications of today's announcement. We've been saying for some time that with all of the AI chatbot competitors out there, what really mattered for the GOOGL bear case was the distribution of its search engine as opposed to debating which bot was better. In this case, while it's presumable/possible that the company could lose a few points of share over the next few years to the degree that the DOJ successfully removes GOOGL's default status, we'd think it's very unlikely that a more material portion of searches move away from Google given users' familiarity and overall Google ecosystem halo. With that said, Apple's unveiling of ChatGPT as an initial preferred partner for iOS 18 technically implied a slightly shrinking moat for GOOGL where today's news could be looked at in the same vein (Apple's hedge now looks rather prescient)."