File photo (Image credit: AP)
U.S. stocks were mixed in choppy trading on Tuesday, as companies flagged weak consumer confidence and investors continued to reassess the impact of artificial intelligence on corporate earnings.The S&P 500 was virtually unchanged after swinging between a modest gain and a loss of about 1%. The Dow Jones Industrial Average rose 28 points, or 0.1%, to 49,536.63 in early trading, while the Nasdaq Composite slipped 0.1% to 22,532.05.
Consumer-focused stocks are under pressure
Shares of General Mills fell 6.9% after the maker of Cheerios, Nature Valley and Pillsbury products warned that customers were feeling uncomfortable. The company cut its forecast for the underlying measure of profit to 2026, saying the decline was likely to be sharper than previously thought.Recent surveys have shown weak confidence among American households, grappling with persistent inflation, a weak job market due to a weak year of growth and concerns over tariffs.Genuine Parts fell 12.3% after reporting weaker-than-expected quarterly results and saying it was “operating in a dynamic environment.” The auto and industrial replacement parts seller also announced plans to split into two publicly traded companies in early 2027, one focused on auto parts and the other on industrial parts.
warner bros discovery Profit on buyout negotiations
Providing some support to the broader market, Warner Bros. Discovery rose about 2.8-2.9% after resuming talks with Paramount Skydance on a buyout offer, giving it a week to top Netflix’s rival bid.Paramount Skydance shares climbed 6.9%, while Netflix fell 0.2%.
Big tech and AI concerns remain
The fall in some Big Tech stocks had an impact on the index. Alphabet fell 1.5%, while Nvidia swung between gains and losses, reflecting volatility in AI-linked stocks.Meta shares were flat, Nvidia slipped 0.1% at one point and Palantir Technologies fell 0.3%.“The turmoil in technology and AI stocks continues this morning,” Peter Cardillo of Spartan Capital Securities was quoted by news agency AFP.“Investors are starting to ask: How long will it take for this spending to mature?” He added. “When you have a lot of movement in an area, that’s usually what happens. “Negative market sentiment will have to take its course.”Investors have become concerned that companies are investing excessive amounts of money in AI infrastructure, such as data centers and chips, without immediate clarity on returns. Alphabet, for example, has said its spending on AI and other investments could double this year to about $180 billion.A survey of global fund managers by Bank of America found that a record percentage believe companies are “overinvesting.”Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, said markets need Big Tech stocks to stabilize and “need to see short selling first/investors need to ask questions later.”Chris Larkin, managing director of trading and investments at Morgan Stanley’s E-Trade, said that although the market remains close to record highs, the sharp selloff has made it more fragile.“Overall, the market is still close to record highs, but some investors may not feel that way due to the sharp selloff that derailed the rally just as it started,” Larkin said.
bond yields stable, global market miscellaneous
In the bond market, the yield on 10-year US Treasuries rose to 4.05% from 4.04% late Friday.Overseas, European markets were bullish, while trading in Asia remained slow due to the Lunar New Year holidays. Japan’s Nikkei 225 slipped 0.4% on weak economic data and SoftBank Group fell 5.1%.The decline followed a strong rally following the Feb. 8 general election, clearing the way for Prime Minister Sanae Takaichi’s ruling party to pursue pro-economy policies.
