Major United States benchmark averages finished mixed on Monday (Tuesday AEDT), with market sentiment remaining fragile amid renewed trade war fears.
The Dow Jones Industrial Average added 33.2 points or 0.1% to finish at 43,461.2, The S&P 500 dipped 29.9 points or 1.2% to 5,983.3, and the Nasdaq Composite fell 241.4 points or 0.8% to 19,286.6.
Major technology companies retreated, as Palantir tumbled 10.5% amid potential defence budget cuts, while Microsoft shed 1% after an analyst report from TD Cowen suggested the company was reducing data centre spending, raising concerns over the artificial intelligence sector.
Microsoft attempted to reassure investors, stating that it remains committed to over US$80 billion in capital expenditures, despite reports of cancelled data centre leases.
The company acknowledged that it may "strategically pace or adjust" infrastructure investments in some areas.
Apple bucked the trend, however, closing 0.6% higher after the tech giant announced a $500 billion investment plan over five years in the U.S., aiming to hire 20,000 workers and manufacture artificial intelligence (AI) servers.
The initiative includes a Houston server factory set to open in 2026 and a manufacturing academy in Detroit. Additionally, data centres in Arizona, California, Iowa, Nevada, North Carolina, Oregon, and Washington will undergo expansions.
The declines followed a turbulent week for equities, with the Dow and Nasdaq both falling more than 2%, while the S&P 500 lost over 1%. On Friday alone, the Dow sank more than 700 points, with the S&P 500 and Nasdaq dropping 1.7% and 2.2%, respectively.
Meanwhile, U.S. President Donald Trump reaffirmed that tariffs on Canada and Mexico would proceed once a postponement period expires next week, further unsettling investors.
Economic concerns also weighed on markets. February’s purchasing managers’ index data indicated a contraction in the U.S. services sector, while the University of Michigan’s consumer sentiment index came in weaker than expected.
Investors are now looking ahead to key economic and corporate earnings reports. Home Depot and Lowe’s are set to release earnings on Tuesday and Wednesday, offering insight into consumer spending trends.
Nvidia’s earnings report on Wednesday evening is expected to be particularly influential, given the company’s significant role in the AI-driven market rally.
The week will conclude with the January personal consumption expenditures (PCE) index release on Friday, the Federal Reserve’s preferred inflation gauge, which could impact expectations for future interest rate decisions.
On the bond markets, the 10-year and 2-year Treasury yields easing by 0.7% and 0.6% to 4.4% and 4.173%, respectively.
