US Stocks Exhibit Mixed Signals Amid Uneasy Trading Session
US stock markets presented a mixed picture during a tense trading session on Tuesday, as corporate warnings about declining consumer confidence and ongoing reassessments of artificial intelligence's impact on earnings created uncertainty. The S&P 500 ended virtually unchanged, fluctuating between a slight gain and a drop of nearly 1%. Meanwhile, the Dow Jones Industrial Average edged up by 28 points, or 0.1%, closing at 49,536.63, while the Nasdaq Composite slipped 0.1% to 22,532.05 in early trading.
Consumer-Focused Stocks Face Significant Pressure
Shares of General Mills plummeted 6.9% after the company, known for brands like Cheerios, Nature Valley, and Pillsbury, issued a warning that customers are feeling increasingly uneasy. The firm revised its profit forecast downward for 2026, indicating that declines in an underlying measure of profit are likely to be more severe than previously anticipated. This move highlights broader concerns as recent surveys reveal weak confidence among US households, who are grappling with persistent inflation, a job market emerging from a year of sluggish growth, and anxieties over potential tariffs.
In another notable decline, Genuine Parts dropped 12.3% following weaker-than-expected quarterly results. The auto and industrial replacement parts seller cited challenges in navigating a dynamic environment and announced plans to split into two publicly traded companies by early 2027—one focused on auto parts and the other on industrial parts.
Warner Bros. Discovery Gains Momentum on Buyout Discussions
Providing some support to the broader market, Warner Bros. Discovery saw its shares rise approximately 2.8–2.9% after reopening talks with Paramount Skydance regarding a buyout offer. The company has been given a week to outbid a rival offer from Netflix. Consequently, Paramount Skydance shares climbed 6.9%, while Netflix experienced a slight dip of 0.2%.
Big Tech and AI Concerns Continue to Linger in Market Sentiment
Losses in several Big Tech stocks exerted pressure on the major indexes. Alphabet fell 1.5%, and Nvidia exhibited volatility, swinging between gains and losses, reflecting the ongoing uncertainty surrounding AI-linked stocks. Meta's shares remained flat, Nvidia slipped 0.1% at one point, and Palantir Technologies declined 0.3%.
Peter Cardillo of Spartan Capital Securities, as quoted by AFP, remarked, "The rut in the technology and AI stocks is continuing this morning. Investors are beginning to question: How long is it going to take for this spending to mature? When you have an excessive amount of momentum in one sector, usually this is what happens. Negative market sentiment is going to have to run its course."
Investors have grown increasingly worried that companies are channeling excessive funds into AI infrastructure, such as data centers and chips, without clear immediate returns. For instance, Alphabet has indicated that its spending on AI and other investments could double this year to approximately $180 billion. A Bank of America survey of global fund managers found a record percentage believe companies are "overinvesting" in this area.
Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, emphasized that markets require Big Tech stocks to stabilize and "need to see less sell first/ask questions later behavior from investors." Chris Larkin, managing director for trading and investing at E-Trade from Morgan Stanley, noted that while the market remains near record highs, sharp sell-offs have contributed to a sense of fragility. "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," Larkin stated.
Bond Yields Hold Steady as Global Markets Show Mixed Results
In the bond market, the yield on the 10-year US Treasury note increased slightly to 4.05% from 4.04% late Friday. Overseas, European markets advanced, while trading in Asia was subdued due to Lunar New Year holidays. Japan's Nikkei 225 slipped 0.4%, weighed down by weak economic data and a 5.1% drop in SoftBank Group. This decline followed a strong rally after the February 8 general election, which paved the way for Prime Minister Sanae Takaichi's ruling party to implement pro-economy policies.
