NEW YORK — More swings for stocks in the artificial-intelligence industry are weighing on Wall Street Tuesday, but the overall U.S. market is holding relatively steady following strong profit reports from several big companies.
The S&P 500 slipped 0.1 per cent to give back some of its gain from Monday. The losses for AI stocks sent the Nasdaq composite down 0.6 per cent, while the Dow Jones Industrial Average was up 0.2 per cent, or 120 points, as of 9:35 a.m. Eastern time.
AI stocks have been at the center of the market’s uneasiness recently, as euphoria around the technology’s boom gives way to worries that high interest rates in the bond market will slow the borrowing that’s allowed companies to buy so many AI chips. Last week was the U.S. stock market’s worst since June.
On Tuesday, the industry’s struggles began in Asia, where a South Korean AI company, Elice, confronted a rough welcome to the stock market. Its stock dropped 32 per cent in its first day of trading in Seoul.
On Wall Street, CoreWeave fell 4.3 per cent. The company, which has borrowed money to buy AI chips that it rents out to customers over the cloud, has been particularly shaky recently. A day earlier, it careened between a gain of 7 per cent in the morning and a loss of 3.5 per cent in the afternoon following last week’s tumble of roughly 25 per cent.
Outside of AI, several stronger-than-expected profit reports for the summer helped support the U.S. stock market. Stock prices tend to follow the path of corporate profits over the long term, and expectations are high for growth this reporting season.
Equifax rallied 7.2 per cent for one of the market’s bigger gains after the credit-reporting company reported a stronger profit for the summer than analysts expected, even as high mortgage rates hurt some parts of its business.
Halliburton added 1.2 per cent after reporting both profit and revenue that was bigger than analysts expected. CEO Jeff Miller said that the work to restore production and rebuild inventories following “one of the largest energy disruptions in history” will drive demand for its olifield services.
In the oil market, the price for a barrel of Brent crude rose 0.9 per cent to US$110.59 and is near its highest level since the war with Iran began in late February.
Another winner on Wall Street was Braze, a customer engagement platform. Its stock soared 51.2 per cent to US$45.43 after Salesforce said it would buy the company for US$47.50 in cash for each share.
Salesforce fell 1.3 per cent.
Also keeping the overall market in check was GE Aerospace, which lost 5 per cent even though it reported a stronger profit for the latest quarter than analysts expected.
General Motors likewise sank despite reporting a bigger profit than analysts expected. It also announced a program to send up to US$20 billion to investors by buying back its stock, but its stock nevertheless fell 5.6 per cent.
The pressure is on companies to deliver bigger profits not only now, but also in the future, to offset worries about high inflation, higher interest rates and other challenges weighing on Wall Street. GM gave a forecasted range for profit over the full year of 2026 whose midpoint fell short of analysts’ expectations.
In stock markets abroad, indexes fell for a second day in Europe following violent protests that could ultimately force governments on the continent to increase their spending to ease voters’ anger. That in turn could put more pressure on their bond markets, which are already strained because of worries about heavy debt loads and strained budgets.
Indexes fell 0.9 per cent in Paris and 0.7 per cent in London.
In Asia, the losses were sharper due to drops for AI and tech stocks. South Korea’s Kospi tumbled 3.7 per cent for one of the world’s larger losses.
___
Stan Choe, The Associated Press
AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
