US stocks opened lower on Tuesday as artificial intelligence-linked shares came under renewed selling pressure and oil prices climbed amid geopolitical tensions.
Investors also looked ahead to a busy earnings calendar, with results from major companies expected to provide further insight into corporate growth and the outlook for technology spending.
The S&P 500 fell 0.13%, while the Nasdaq Composite declined 0.51%.
The Dow Jones Industrial Average opened 0.14% higher.
The weakness followed a recovery during Monday’s session, when the S&P 500 gained 0.4%, and the Nasdaq Composite advanced more than 1%.
Investors had bought technology stocks after last week’s selloff, which was driven partly by concerns about the debt required to finance AI infrastructure.
AI stocks retreat as debt concerns weigh on sentiment
Several technology and semiconductor stocks declined in trading. CoreWeave and Nebius Group fell around 4.6% each, while Apple dropped 0.3% and Nvidia slipped about 1.38%.
Micron Technology and SanDisk lost around 2% each. Seagate Technology, Intel and Advanced Micro Devices declined more than 1%, while the VanEck Semiconductor ETF fell more than 1.4%.
The pullback followed renewed concerns about the sustainability of AI-related investments, particularly the borrowing costs and financing requirements associated with expanding data centre capacity.
CoreWeave remained under pressure after losing more than 25% last week.
The company attempted to recover some of those losses on Monday following an upgrade from Goldman Sachs, but its early gains faded, and the stock finished slightly lower.
Sentiment also weakened after South Korean AI infrastructure company Elice Group fell nearly 30% in its market debut, trading below its initial public offering price.
The company raised 201.1 billion won, equivalent to approximately $151.12 million, through the offering.
Investors are increasingly assessing whether companies investing heavily in AI can translate that spending into sustainable earnings and cash flow.
Oil prices climb amid geopolitical risks
Oil prices provided another source of uncertainty for equity markets.
Brent crude traded near a five-month high as investors factored in risks associated with attacks on Saudi infrastructure by Yemen’s Iran-aligned Houthis and reports of vessel attacks in the Persian Gulf.
Rising energy prices can add to inflationary pressures, potentially complicating the economic outlook and the path of interest rates.
The combination of geopolitical uncertainty and concerns about AI financing has left investors cautious following last week’s technology-led market decline.
Monday’s recovery offered some relief, but the renewed weakness in futures suggested that sentiment remained fragile.
Corporate earnings in focus as companies report results
Investors are closely monitoring quarterly results this week for indications of whether companies can sustain growth amid mounting macroeconomic risks.
SpaceX and Netflix are scheduled to report results after Tuesday’s market close, followed by Meta Platforms and Tesla on Wednesday.
Individual corporate updates also influenced trading. Steel Dynamics fell 3.29% after missing third-quarter profit estimates, while General Motors dropped 5.24% after forecasting annual earnings below analysts’ expectations.
Shares of 3M advanced 3.4% after the company expanded its data-centre partnership with Amazon and raised its full-year profit forecast.
Qualcomm shares declined around 0.2% after the chipmaker announced plans for global job cuts following its annual employee reviews.
The upcoming earnings reports could help investors assess corporate profitability and the outlook for AI investment as markets navigate renewed pressure on technology stocks and higher oil prices.
The post Nasdaq opens 0.5% lower as AI stocks slide and oil prices rise amid tensions appeared first on Invezz
