US stock indices were subdued in volatile trading on Tuesday, following persistent anxieties regarding the future of artificial intelligence (AI) and as market participants redirected their attention toward the US-Iran nuclear negotiations.
The volatility triggered by AI underscores concerns that are becoming notably contradictory. One perspective suggests that the technology is set to overhaul entire economic sectors so radically that shareholders are offloading stocks in any firm perceived to be even slightly vulnerable to displacement. Conversely, there is profound doubt regarding whether the massive capital investments, totaling hundreds of billions of dollars, will yield significant financial returns in the near future.
At 11:45 a.m. ET, the Dow Jones Industrial Average rose 33.25 points, or 0.07%, to 49,534.18, the S&P 500 gained 0.63 points, or 0.01%, to 6,836.80, and the Nasdaq Composite lost 21.58 points, or 0.10%, to 22,525.09.
In a massive reversal, the S&P 500 erased all losses on the day and turned green. It added $600 billion in 30 minutes.
The S&P 500 financials lifted the benchmark, adding 1.2%.
As of 10 a.m. Eastern Time, the S&P 500 fell 0.8%. The Dow Jones Industrial Average was down 0.4% and the Nasdaq Composite was 1.2% lower.
At the open, the Dow Jones Industrial Average rose 24.4 points, or 0.05%, to 49,525.37. The S&P 500 fell 16.3 points, or 0.24%, to 6,819.86, while the Nasdaq Composite dropped 151.9 points, or 0.67%, to 22,394.756.
Markets require such companies, which are Wall Street’s most influential, to stabilize and “need to see less sell first/ask questions later behavior from investors,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, according to Associated Press.
“AI disruption and continued tech rotation overshadowed last week’s jobs and inflation data, and unless this week’s economic numbers deliver notable surprises, the same dynamic could play out again,” said Chris Larkin at E*Trade from Morgan Stanley, according to Bloomberg.
“The market is still close to records highs, but it may not feel that way to some investors because of the sharp selloffs that seem to derail upswings almost as soon as they begin,” Larkin said.
In the bond market, the yield on the 10-year Treasury was steady at 4.04%.
Key Stock Movers
Among the tech and AI stocks, Nvidia fell 1.8%, Microsoft lost 1.5%, Google-parent Alphabet slipped 2.71%, Advanced Micro Devices (AMD) shed 5.16%, and Broadcom dropped 0.58%.
General Mills shares sank 6.8% after the firm said customers are feeling less confident.
Among big banks, Goldman Sachs and JPMorgan Chase rose 1.5% each.
Genuine Parts stock dropped 11.5% after the company said it’s “navigating a dynamic environment” while reporting weaker quarterly profit and revenue than analysts expected.
Warner Bros. Discovery shares rose 2.4% after the entertainment firm said it was trying to get the “best and final” buyout offer from Paramount. Paramount Skydance rose 7.2%, while Netflix fell 1.8%.
Bullion Market
Gold prices fell below $4,900 an ounce on Tuesday as China was closed for Lunar New Year. Silver also retreated.
Spot gold dropped as much as 3%, reaching its lowest intraday level in more than a week.
Crude Oil
Oil prices edged lower on Tuesday as Iran gave an encouraging response during second round of talks with the US in Geneva on its nuclear programme.
West Texas Intermediate was down 0.2% at $62.75 per barrel after earlier jumping 1.5%, while international benchmark Brent North Sea Crude slipped 1.4% to $67.64.