Wall Street Dips, S&P 500 Falls Amid AI Investment Concerns/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks fell Tuesday as trading resumed after a three-day holiday weekend. Losses in Big Tech and weak earnings reports pressured major indexes. Investors remain uneasy about AI spending, inflation, and consumer confidence.
US Stock Market Slips After Holiday Quick Looks
- S&P 500 down 0.8%
- Dow Jones Industrial Average off 183 points
- Nasdaq Composite falls 1.2%
- General Mills sinks after cutting outlook
- Genuine Parts Company drops on weak earnings
- AI investment concerns weigh on tech stocks
- Treasury yields steady near 4%
Deep Look: US Stock Indexes Slip as Trading Resumes After Holiday
U.S. stock markets edged lower Tuesday as investors returned from a three-day holiday weekend, with technology shares and disappointing corporate updates weighing on sentiment.
The S&P 500 declined 0.8%, putting it on track for its fourth loss in five sessions. The Dow Jones Industrial Average fell 183 points, or 0.4%, while the Nasdaq Composite slid 1.2% in early trading.
Consumer and Industrial Stocks Under Pressure
Shares of General Mills tumbled 6.8% after the maker of Cheerios and Nature Valley lowered its 2026 profit outlook. The company cited declining consumer confidence and projected steeper-than-expected profit drops.
Recent surveys suggest U.S. households are feeling squeezed by persistent inflation, a cooling labor market, and uncertainty surrounding tariffs and global trade policy.
Genuine Parts Company dropped 11.5% after reporting weaker-than-expected quarterly profit and revenue. The company, which supplies automotive and industrial replacement parts, also announced plans to split into two separate publicly traded businesses in early 2027.
Tech Stocks Weigh on Indexes
Major technology names were among the biggest drags on the broader market. Nvidia fell 1.8%, while Microsoft declined 1.5%.
Wall Street has become increasingly sensitive to signs that companies may be overinvesting in artificial intelligence infrastructure, including data centers and advanced chips. Investors are questioning whether the massive capital expenditures will translate into sufficient long-term profits.
A recent survey from Bank of America found a record share of global fund managers believe companies are “overinvesting” in AI-related initiatives.
Sameer Samana of Wells Fargo Investment Institute said markets need influential technology companies to stabilize and called for less “sell first, ask questions later” behavior among investors.
Last week saw sharp swings as traders reassessed which firms could benefit from — or be hurt by — AI-driven disruption.
Chris Larkin of E-Trade noted that while markets remain near record highs, repeated pullbacks have dampened investor enthusiasm.
Media and Entertainment Moves
Helping limit broader losses was Warner Bros. Discovery, which rose 2.4% after signaling it is seeking a “best and final” buyout offer from Paramount Global, as Paramount works to improve on a competing offer from Netflix.
Paramount shares jumped 7.2%, while Netflix slipped 1.8%.
Bond Market and Global Stocks
In the bond market, the yield on the 10-year U.S. Treasury held steady at 4.04%, unchanged from late Friday levels. Stable yields provided some support to equities but were not enough to offset broader concerns.
Overseas, European markets posted modest gains. In Asia, trading was subdued due to Lunar New Year holidays in several countries. Japan’s Nikkei 225 fell 0.4%, pressured by weak economic data and a 5.1% drop in SoftBank Group shares.
The decline in Tokyo followed a recent rally sparked by Prime Minister Sanae Takaichi’s party winning Japan’s February 8 general election.
Market Outlook
Despite the recent dip, U.S. stock indexes remain close to record levels. Still, volatility tied to corporate earnings, AI spending skepticism, and macroeconomic uncertainty continues to unsettle investors.
With inflation concerns lingering and geopolitical tensions simmering globally, Wall Street appears poised for continued choppy trading in the weeks ahead.
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