A trader looks at a screen that charts the S&P 500 on the floor of the New York Stock Exchange (NYSE) in New York, U.S., April 27, 2017. REUTERS/Brendan McDermid/File Photo Purchase Licensing Rights, opens new tab
- Royal Caribbean rises on higher-than-expected profit forecast
- Lockheed Martin drops after lower 2025 profit view
- Indexes up: Dow 0.14%, S&P 500 up 0.49%, Nasdaq up 1.24%
Jan 28 (Reuters) – Wall Street’s main indexes overcame a choppy start to move higher on Tuesday, as AI-linked shares rebounded from sharp losses in the last session and helped the tech-heavy Nasdaq lead gains.
Monday’s rout in tech stocks came after Chinese startup DeepSeek launched artificial intelligence models it said were on a par or better than industry-leading rivals in the United States at a fraction of the cost.
AI chip leader Nvidia
rose 2.6%, a day after $593 billion was wiped off its market value in the biggest single-session loss for any company. A gauge of semiconductor shares
edged 0.9% lower after losing more than 9% on Monday.
At 11:56 a.m. ET, the Dow Jones Industrial Average
rose 64.23 points, or 0.14%, to 44,775.51, the S&P 500
gained 29.71 points, or 0.49%, to 6,041.99 and the Nasdaq Composite
gained 240.65 points, or 1.24%, to 19,582.50.
Eight of the 11 S&P 500 sectors were in the red. Utilities
were the biggest decliners with a 2.1% fall, while technology stocks
led gains with a 2.2% rise.
Boosting the Nasdaq, Apple
jumped 4.2%, while most megacap stocks also trended higher.
“The selloff was an overreaction, the fact that a Chinese company poses sincere competition for the whole AI ecosystem should not be surprising,” said Jim Elios, chief investment officer at Elios Financial Group.
“A correction in some of the AI-related stocks was inevitable”.
The Nasdaq
dropped more than 3% on Monday, its worst single-day showing in more than a month, while the benchmark S&P 500
fell close to 1.5%.
On Tuesday, General Motors
posted fourth-quarter 2024 results and a 2025 earnings forecast ahead of expectations. Its shares, however, slid 10.8% as investors weighed the threat of tariffs that could hit the automaker’s business.
Boeing
shares, last up 4.4%, were volatile after the planemaker reported its biggest annual loss since 2020.
Royal Caribbean
gained 12.3% as the cruise operator forecast annual profit largely above expectations, while Lockheed Martin
dropped 8.2% after the defense giant forecast 2025 profit below estimates.
Aerospace and defense major RTX
gained 2.1% after posting a rise in quarterly profit.
Earnings from “Magnificent 7” members Microsoft
, Facebook-parent Meta
, Apple
and Tesla
are due later this week.
Also in focus, the Federal Reserve is widely expected to hold its lending rate steady in its first interest-rate decision of the year on Wednesday, while the December reading of personal consumption expenditures (PCE) is scheduled for Friday.
U.S. President Donald Trump said late on Monday he plans to impose tariffs on imported computer chips, pharmaceuticals and steel.
A media report said newly elected Treasury secretary Scott Bessent has been pushing for new universal tariffs on U.S. imports to start at 2.5% and rise gradually by the same amount each month.
Markets have been on edge about Trump’s proposed tariffs due to concerns they could worsen inflationary pressures and slow Fed rate cuts.
Declining issues outnumbered advancers by a 1.71-to-1 ratio on the NYSE and by a 1.72-to-1 ratio on the Nasdaq.
The S&P 500 posted 32 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 58 new highs and 113 new lows.
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Reporting by Shashwat Chauhan, Lisa Pauline Mattackal and Sukriti Gupta in Bengaluru; Editing by Devika Syamnath
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