Carnival Corporation (CCL) saw its shares plunge 5.06% in pre-market trading on Tuesday, as investor sentiment in the cruise industry soured following Royal Caribbean's mixed earnings report. The drop in Carnival's stock price reflects broader concerns about the cruise sector's financial health and booking trends.

Royal Caribbean, a major competitor to Carnival, reported third-quarter results that beat profit expectations but fell short on revenue. Despite raising its full-year outlook, Royal Caribbean's stock dropped more than 7% in pre-market trading. The company's CEO, Jason Liberty, highlighted a "strong booked position" but the market appeared unconvinced, focusing instead on the revenue miss and lower-than-expected net yields.

The negative sentiment spread to other cruise operators, with Norwegian Cruise Line Holdings also experiencing a pre-market decline of about 3%. This industry-wide reaction suggests that investors are reassessing their outlook on cruise stocks, despite recent reports of strong cruise demand. The last-minute booking trend observed by Royal Caribbean may be raising concerns about the predictability of future revenues across the sector, affecting Carnival's stock price in turn.