NEW YORK (AP) — The U.S. stock market is swinging in uneasy trading on Tuesday as companies talk about how discouraged their customers are feeling and tech stocks continue to feel the downside of the artificial-intelligence boom.
The S&P 500 fell 0.5% after flipping from a modest gain to a loss of nearly 1%. The Dow Jones Industrial Average was down 167 points, or 0.3%, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.7% lower.
General Mills sank 7.2% after the company behind the Cheerios, Nature Valley and Pillsbury brands said customers are feeling less confident. It cut its forecast for an underlying measure of profit for 2026, saying declines would likely be sharper than it earlier expected.
Several surveys have recently shown weak confidence among U.S. 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.
Genuine Parts, which sells auto and industrial replacement parts, said it’s also “navigating a dynamic environment” while reporting weaker results for the latest quarter than analysts expected.
It plans to split into two separate, publicly traded companies in early 2027, with one focusing on auto parts and the other on industrial parts. Genuine Parts' stock dropped 11.9%
Helping to keep the market’s losses in check was Warner Bros. Discovery. It rose 2.3% after saying it was trying to get the “best and final” buyout offer from Paramount, which is trying to top an offer to buy the entertainment company from Netflix.
Paramount Skydance rose 6.2%, and Netflix fell 1%.
Losses for some Big Tech stocks were the heaviest weights on the market Tuesday, including a 1.9% drop for Alphabet. The moves were tentative, though, and Nvidia swung between a loss of 2% and a gain of 0.3%.
Markets need such companies, which are Wall Street's most influential, to stabilize and “need to see less sell first/ask questions later behavior from investors,” according to Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.
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.
“Overall, the market is still close to records highs, but it may not feel that way to some investors because of the sharp sell-offs that seem to derail upswings almost as soon as they begin,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
This year has seen a sharp turnaround from prior years, when the promise of AI helped drive U.S. stock indexes to record after record. Now, companies in industries stretching from software to legal services to trucking have seen investors suddenly turn against them when worries flare that AI-powered competitors could steal their customers.
And the companies spending big on AI are feeling their own pressure, too.
Global fund managers say they're worried that companies are pouring too many dollars into AI data centers and chips. They will need to see tremendous profits and productivity come out of investments to make it worth it. Alphabet, for example, said its spending on AI equipment and other investments could double this year to roughly $180 billion.
A survey of global fund managers by Bank of America found a record percentage is saying that companies are “overinvesting.”
In the bond market, Treasury yields held relatively steady.
The yield on the 10-year Treasury held at 4.04%, where it was late Friday.
In stock markets abroad, indexes rose modestly in Europe following a quiet day in Asia, where most markets were closed for Lunar New Year holidays.
Japan’s Nikkei 225 slipped 0.4%. Weak economic data for Japan appeared to be clouding sentiment in Tokyo, and a 5.1% decline for tech giant SoftBank Group also pulled shares lower. The decline follows a big rally after a resounding win for Prime Minister Sanae Takaichi’s ruling party in a Feb. 8 general election.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
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