Nasdaq, S&P 500 Slip as AI Jitters Linger
U.S. stocks opened Tuesday’s shortened trading week on mixed footing, with tech once again under pressure as investors continued to reassess the AI trade.
The tech-heavy Nasdaq Composite (^IXIC) fell roughly 0.5%, while the S&P 500 (^GSPC) dipped about 0.2%. The Dow Jones Industrial Average (^DJI), which carries less exposure to high-growth tech names, rose roughly 0.3%.
After markets were closed for Presidents Day, investors returned to the same dominant theme that has pressured equities for weeks: uncertainty around artificial intelligence spending, valuations, and long-term returns.
The Dow and S&P 500 have now fallen in four of the past five weeks, reflecting broader caution as markets digest both earnings results and macro risks.
AI Anxiety Spreads Beyond Tech
While semiconductor stocks initially bore the brunt of AI volatility, the ripple effects are spreading.
Fresh concerns about AI’s potential to disrupt established industries have hit stocks across:
- Wealth management
- Transportation
- Logistics
- Enterprise software
Investors are increasingly debating whether capital expenditures tied to AI will generate the returns implied by current valuations — or if the market has run ahead of fundamentals.
Earnings Enter Final Stretch
Earnings season is nearing its conclusion, and several key reports this week could shape market direction.
Among Tuesday’s releases:
- Constellation Energy (CEG) — closely watched for insight into how AI-driven power demand is impacting utilities and infrastructure
- Medtronic (MDT) — a gauge of healthcare spending trends
- Palo Alto Networks (PANW) — cybersecurity demand in an increasingly digital economy
The week’s most anticipated report comes Thursday from Walmart (WMT) — its first earnings release since reaching a trillion-dollar market capitalization. Investors will look for signals on consumer resilience, pricing power, and inventory management.
M&A Watch: Paramount and Warner Bros.
In corporate news, shares of Paramount Skydance (PSKY) rose 5% at the open after Warner Bros. Discovery (WBD) reportedly gave the studio one week to submit an improved takeover offer.
Warner Bros. previously rejected the latest bid, keeping the high-profile media deal in play.
Economic Data in Focus
This shortened week is packed with delayed economic readings following the partial U.S. shutdown.
Key releases include:
- Personal Consumption Expenditures (PCE) index on Friday — the Federal Reserve’s preferred inflation gauge
- An advance estimate of fourth-quarter GDP, also Friday
- Minutes from the Federal Reserve’s January policy meeting
Investors are watching closely for clues on the path of interest rates, particularly as debate intensifies over the timing and pace of potential rate cuts this year.
Oil Prices Fall on Iran Deal Signals
Energy markets also moved lower Tuesday after Iran announced it had reached a “general agreement” with the U.S. on a potential nuclear deal that could ease sanctions.
- Brent crude (BZ=F) fell 0.6% to below $67.50
- West Texas Intermediate (CL=F) dropped 0.9% to around $62.25
A potential lifting of sanctions could increase global oil supply, placing downward pressure on crude prices.
WSA Take
Markets remain in recalibration mode.
AI remains the central narrative — but enthusiasm is now competing with valuation scrutiny. Investors are no longer just rewarding spending; they’re demanding visibility into returns.
With inflation data, GDP figures, and Walmart earnings all landing in the same week, volatility could persist.
For now, tech leads the downside, energy softens, and the broader market waits for its next catalyst.
Explore More Stories in Markets
Disclaimer
WallStAccess is a financial media platform providing market commentary and analysis for informational and educational purposes only. This content does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers should conduct their own research or consult a licensed financial professional before making investment decisions.
