Stocks Rise Slightly as Tech Shares Recover
US stocks posted modest gains on Tuesday, as technology stocks recovered from lows and financial stocks also provided support.
After falling about 1.5% in its session’s decline, the S&P 500 information technology sector weighed in and was up about 1% as gains in Nvidia and Apple overcame declines in Microsoft and Oracle.
Concerns about artificial intelligence disrupting business models prompted a sell-off in software firms, brokerages and trucking companies last week, causing Wall Street’s three main indexes to register their biggest weekly declines since mid-November.
“There are a lot of different trends happening in terms of what investors want to invest right now and you see that in this market where you see spikes up and spikes down, maybe not every day, but every day,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
“The market is looking very short term here and there will be a return to AI games very favourably.”
The potential threat from China’s AI players has heightened uncertainty. On Monday, Alibaba launched a new AI model, Qwen 3.5, designed to autonomously perform complex tasks.
Even with the rebound in tech names, software stocks remain under pressure, with the S&P 500 software index down 1.6%. CrowdStrike fell 4.4% and Intuit fell 5.4%.
The Dow Jones Industrial Average rose 154.41 points, or 0.31%, to 49,655.03, the S&P 500 gained 26.17 points, or 0.38%, to 6,862.34 and the Nasdaq Composite added 112.95 points, or 0.38% to .
The S&P 500 financial index was the best performer of the 11 major S&P sectors on the day, with a gain of 1.2%. Gains at banks such as Goldman Sachs and JPMorgan Chase also lifted the Dow.
Consumer staples were among the worst-performing S&P 500 sectors this session, dragged down by a more than 8% fall in General Mills after the cereal maker cut its core annual sales and profit forecasts.
This week, the personal consumption expenditure report – the US Federal Reserve’s inflation gauge – will focus on understanding inflation and how it could affect the central bank’s rate cut.
The data follows cooler-than-expected consumer price inflation data last week that slightly increased bets on an interest rate cut this year.
Traders are pricing in a roughly 63% chance of a rate cut of at least 25 basis points at the Fed’s June meeting, the first with more than 50% odds.
Chicago Fed President Austan Goolsbee said the Fed could authorize “substantial” interest rate cuts this year if inflation falls back to the central bank’s 2% target, and Governor Michael Barr said another central bank rate cut could happen somewhere amid persistent risks to the US inflation outlook.
Norwegian Cruise Line rose more than 13%, the best performer in the S&P 500, after activist investor Elliott said it built a more than 10% stake in cruise passengers.
Fiserv shares gained more than 7% after the Wall Street Journal reported that activist investor Jana Partners had a stake in the payments company.
Masimo rose 34% after Danaher said it would buy the pulse-oximeter maker for $9.9 billion, including debt. Danaher shares shed nearly 3%.
Bearish issues outnumbered advancers by a 1.06-to-1 ratio on the NYSE, while on the Nasdaq, forward issues outnumbered decliners by a 1.08-to-1 ratio.
The S&P 500 posted a new 52-week high and 10 new highs, and the Nasdaq Composite recorded 73 new highs and 197 new lows.
(Reporting by Chuck Mikolajczak in New York; additional reporting by Purvi Agarwal and Twesha Dikshit in Bengaluru; Editing by Pooja Desai and Matthew Lewis)
