A quiet finish for the US stockmarket on Tuesday masked big swings underneath the surface as companies talked about how discouraged their customers are feeling and some tech stocks continued to feel the downside of the artificial-intelligence boom.
The S&P 500 rose 0.1% after flipping earlier between a gain of 0.5% and a loss of nearly 1%. The Dow Jones Industrial Average added 32 points, or 0.1%, and the Nasdaq composite gained 0.1%.
All told, the S&P 500 added 7.05 points to 6,843.22. The Dow Jones Industrial Average rose 32.26 to 49,553.19, and the Nasdaq composite gained 31.71 to 22,578.38.
Several surveys have recently shown weak confidence among US households, which are struggling with inflation that remains higher than anyone would like, a job market coming off a weak year of growth and worries about tariffs.
Tech stocks drop
Drops for some Big Tech stocks were the heaviest weights on the market Tuesday, including a 1.2% fall for Alphabet.
The moves were tentative, though, and Nvidia swung between being one of the market's heaviest weights and one of its biggest strengths.
Last week, Wall Street shook when stocks of software and other companies tumbled as investors hunted for companies that could be potential losers if AI ends up remaking the world and their industries.
The market has seen a sharp turnaround from prior years, when the promise of AI helped drive US stock indexes to record after record. Now, companies in industries as varied as software and legal services and trucking have seen investors suddenly turn against them when worries flare that AI-powered competitors could steal their customers.
Concerns brewing about over-investment
The companies spending big on AI are feeling their own pressure, too.
Global fund managers say they're worried about the risk that companies are pouring too many dollars into AI data centres and chips. Those companies will need to see tremendous profits and productivity to make their investments worth it. Alphabet, for example, said its spending on AI and other investments could double this year to roughly $US180 billion.
A survey of global fund managers by Bank of America found a record percentage is saying that companies are "overinvesting." That could mean an eventual pullback in spending on chips from Nvidia and other companies.
