Major Indexes Edge Lower
U.S. equities retreated modestly, snapping a recent stretch of gains as concerns about artificial intelligence disruption and geopolitical tensions weighed on sentiment. The S&P 500 fell 0.3% for its first decline in four sessions, shedding 19.42 points to close at 6,861.89.
The Dow Jones Industrial Average dropped 267.50 points, or 0.5%, ending at 49,395.16. The Nasdaq Composite also slipped 0.3%, losing 70.91 points to finish at 22,682.73.
While headline moves were relatively contained, individual stocks experienced sharp swings.
AI Anxiety Hits Multiple Sectors
Booking Holdings declined 6.1%, despite reporting quarterly profit that slightly exceeded analysts’ expectations. The parent company of Booking.com, Priceline, and OpenTable has faced mounting pressure from concerns that artificial intelligence-driven competitors could reshape the online travel industry. Its shares are down roughly 25% so far this year.
The wave of AI-related uncertainty has spread across industries including software, legal services, and logistics. Analysts have described investor behavior as a “shoot first, ask questions later” approach, with markets swiftly penalizing companies perceived as vulnerable to technological disruption.
The ripple effects have also hit private credit firms exposed to those businesses. Blue Owl Capital fell 5.9%, bringing its year-to-date loss to 22.5%. Apollo Global Management dropped 5.2%, and Ares Management slid 3.1%.
Carvana sank 7.9% even after delivering stronger-than-expected quarterly profit. Investors appeared focused on lower-than-anticipated profit per vehicle sold.
Walmart initially rose 2.7% before reversing course to close down 1.4%. Although the retail giant posted solid quarterly results, its profit outlook for the coming year disappointed investors.
Energy Stocks Provide Support
Limiting broader market losses were gains in industrial and energy names. Deere surged 11.6% after reporting better-than-expected earnings. CEO John May pointed to improving demand from construction and smaller agricultural customers, though large global farming operations remain under pressure.
Oil producers benefited from rising crude prices. Benchmark U.S. crude climbed 1.9% to $66.43 per barrel, while Brent crude rose 1.9% to $71.66. Occidental Petroleum advanced 9.4% following stronger quarterly profit.
Oil prices have climbed amid escalating tensions between the United States and Iran. Concerns that a potential military conflict could disrupt global oil supplies have added upward pressure to energy markets.
Bond Yields Steady as Data Mixed
In the bond market, Treasury yields were little changed. The yield on the 10-year Treasury slipped to 4.07% from 4.09% the previous day after data showed a decline in new unemployment claims, suggesting layoffs may be slowing.
A resilient labor market could keep the Federal Reserve cautious about cutting interest rates further this year. Policymakers have emphasized they want additional evidence of cooling inflation before easing monetary policy.
Additional economic reports painted a mixed picture. Manufacturing activity in the mid-Atlantic region accelerated, but pending home sales declined in January. The U.S. trade deficit widened in December by more than economists had forecast.
Global Markets Mixed
European markets fell, while Asian markets showed stronger momentum. South Korea’s Kospi jumped 3.1% as trading resumed following the Lunar New Year holiday. Exchanges in Hong Kong and Shanghai remained closed.
