US stocks were mixed in uneasy trading on Tuesday as companies flagged weakening consumer confidence and investors continued reassessing the impact of artificial intelligence on corporate earnings.
The S&P 500 was virtually unchanged after swinging between a modest gain and a drop of nearly 1%.
The Dow Jones Industrial Average rose 28 points, or 0.1%, to 49,536.63, while the Nasdaq Composite slipped 0.1% to 22,532.05 in early trading.
Consumer-focused stocks under pressure
Shares of General Mills tumbled 6.9% after the maker of Cheerios, Nature Valley and Pillsbury products warned that customers are feeling uneasy.
The company cut its forecast for an underlying measure of profit for 2026, saying declines are likely to be sharper than previously expected.
Recent surveys have shown weak confidence among US households grappling with persistent inflation, a job market coming off a weak year of growth and concerns over tariffs.
Genuine Parts dropped 12.3% after reporting weaker-than-expected quarterly results and saying it is “navigating 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 gains on buyout talks
Providing some support to the broader market, Warner Bros. Discovery rose about 2.8–2.9% after reopening talks with Paramount Skydance on a buyout offer, giving it a week to top a rival bid from Netflix.
Paramount Skydance shares climbed 6.9%, while Netflix dipped 0.2%.
Big tech and AI concerns continue to linger
Losses in some Big Tech stocks weighed on the indexes. Alphabet fell 1.5%, while Nvidia swung between gains and losses, reflecting volatility in AI-linked stocks.
Shares of Meta were flat, Nvidia slipped 0.1% at one stage and Palantir Technologies fell 0.3%.
“The rut in the technology and AI stocks is continuing this morning,” said Peter Cardillo of Spartan Capital Securities, as quoted by news agency AFP.
“Investors are beginning to question: How long is it going to take for this spending to mature?” he added. “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 concerned that companies are pouring excessive amounts into AI infrastructure such as data centers and chips, without immediate clarity on returns.
Alphabet, for instance, has 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 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 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 close to record highs, sharp sell-offs have made it feel more fragile.
“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 said.
Bond yields steady, global markets mixed
In the bond market, the yield on the 10-year US Treasury edged up to 4.05% from 4.04% late Friday.
Overseas, European markets advanced, while trading in Asia was muted 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.
The decline followed a strong rally after the February 8 general election cleared the way for Prime Minister Sanae Takaichi’s ruling party to push pro-economy policies.
