Stan Choe
The US stock market is swinging in uneasy trading on Tuesday as companies talk about how discouraged their customers are feeling and some tech stocks continue to feel the downside of the artificial-intelligence boom.
The S&P 500 was virtually unchanged after flipping earlier between a small gain and a loss of nearly 1 per cent. The Dow Jones was up 28 points, or 0.1 per cent, as of 11:45 a.m. Eastern time, and the Nasdaq composite was 0.1 per cent lower.
The Australian sharemarket is set to rise, with futures at 4.59am AEDT pointing to a gain of 25 points, or 0.3 per cent, at the open. The ASX added 0.2 per cent on Tuesday. The Australian dollar was trading at US70.68¢ at 5.14am AEDT. Reporting season continues with National Australia Bank, Suncorp, Mirvac and Santos among companies due up.
General Mills sank 6.9 per cent after the company behind the Cheerios, Nature Valley and Pillsbury brands said customers are feeling uneasy. It cut its forecast for an underlying measure of profit for 2026, saying declines would likely be sharper than it earlier expected.
Several surveys have recently shown weak confidence among US households, which are struggling with inflation that remains higher than anyone would like, a job market coming off a weak year of growth and worries about tariffs.
Genuine Parts, which sells auto and industrial replacement parts, said it’s also “navigating a dynamic environment” while reporting weaker results for the latest quarter than analysts expected.
It plans to split into two separate, publicly traded companies in early 2027, with one focusing on auto parts and the other on industrial parts. Genuine Parts’ stock dropped 12.3 per cent
Helping to support the market was Warner Bros. Discovery. It rose 2.9 per cent after saying it was trying to get the “best and final” buyout offer from Paramount, which is trying to top an offer from Netflix to buy the entertainment company.
Paramount Skydance rose 6.9 per cent, and Netflix fell 0.2 per cent.
Drops for some Big Tech stocks were the heaviest weights on the market Tuesday, including a 1.5 per cent fall for Alphabet.
The moves were tentative, though, and Nvidia swung between being one of the market’s heaviest weights and one of its biggest strengths.
Markets need such Big Tech companies, which are Wall Street’s most influential, to stabilize and “need to see less sell first/ask questions later behavior from investors,” according to Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.
Last week, Wall Street shook when stocks of software and other companies tumbled as investors hunted for companies that could be potential losers if AI ends up remaking the world and their industries.
“Overall, the market is still close to records highs, but it may not feel that way to some investors because of the sharp sell-offs that seem to derail upswings almost as soon as they begin,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
The market has seen a sharp turnaround from prior years, when the promise of AI helped drive U.S. stock indexes to record after record. Now, companies in industries stretching from software to legal services to trucking have seen investors suddenly turn against them when worries flare that AI-powered competitors could steal their customers.
The companies spending big on AI are feeling their own pressure, too.
Global fund managers say they’re worried about the risk that companies are pouring too many dollars into AI data centers and chips. Those companies will need to see tremendous profits and productivity to make their investments worth it. Alphabet, for example, said its spending on AI and other investments could double this year to roughly $180 billion.
A survey of global fund managers by Bank of America found a record percentage is saying that companies are “overinvesting.”
In the bond market, Treasury yields held relatively steady.
The yield on the 10-year Treasury inched up to 4.05 per cent from 4.04 per cent late Friday.
In stock markets abroad, indexes rose in Europe following a quiet day in Asia, where most markets were closed for Lunar New Year holidays.
Japan’s Nikkei 225 slipped 0.4 per cent. Weak economic data for Japan appeared to weigh on the market, and a 5.1 per cent decline for tech giant SoftBank Group also pulled shares lower. The decline followed a big rally after a February 8 general election appeared to clear the way for Prime Minister Sanae Takaichi’s ruling party to push through policies to help the economy.