Wall Street ended sharply lower on Tuesday as investors worried about artificial intelligence (AI) creating more competition for software makers, keeping them on edge ahead of quarterly reports from Alphabet and Amazon later this week.
AI heavyweights Nvidia and Microsoft both fell. Alphabet dropped ahead of its report on Wednesday, while Amazon declined ahead of its Thursday report.
Investors in recent months have become pickier about AI-related stocks, looking for companies generating measurable returns from their outsized investments in the new technology.
Wall Street’s attention on Tuesday turned to technology companies that could face steeper competition and lower margins as a result of AI. One catalyst driving those concerns was Anthropic’s launch of a legal tool for its Claude AI chatbot.
“We're looking at a lot of software names that are seen as companies that may well be disrupted when we start to see the advancement of artificial intelligence. We're seeing a lot of software companies across the spectrum get hit,” said Art Hogan, chief market strategist at B. Riley Wealth.
Salesforce, Adobe, Synopsys, Datadog, Atlassian and Intuit fell sharply.
AI data firm Palantir bucked the trend, rallying after strong quarterly results late on Monday.
The S&P 500 software and services index fell for a fifth consecutive day.
"We've got an expensive market and expectations are really high. Many areas, especially around AI, are priced for perfection. That's just got us in a skittish environment," said John Campbell, senior portfolio manager, Allspring Global Investments.
Healthcare stocks came under pressure after Wegovy maker Novo Nordisk warned that it expected a steep decline in annual sales. The company's U.S.-listed shares plummeted.
Rival Eli Lilly fell, as did obesity drugmakers Viking Therapeutics and Structure Therapeutics.
Walmart climbed to become the first brick-and-mortar retailer ever to hit $1 trillion in stock market value.
Advanced Micro Devices fell ahead of its quarterly report after the bell.
Walt Disney dipped after it named theme parks head Josh D'Amaro as CEO, placing a longtime insider at the helm and ending succession uncertainty.
PayPal slumped after it forecast 2026 profit below estimates.
According to preliminary data, the S&P 500 lost 59.04 points, or 0.85%, to end at 6,917.40 points, while the Nasdaq Composite lost 336.20 points, or 1.42%, to 23,255.91.
The Dow Jones Industrial Average fell 170.98 points, or 0.35%, to 49,236.68.
With one quarter of the S&P 500 set to report quarterly results this week, analysts expect companies to have grown their earnings nearly 11% in the December quarter, up from an estimate of about 9% at the start of January, according to LSEG data.
Pfizer fell despite posting fourth-quarter profit above estimates, while Merck rose after quarterly results.
PepsiCo shares gained after the company announced price cuts on core brands such as Lay's and Doritos.
Meanwhile, legislation to end a U.S. government shutdown narrowly cleared a procedural hurdle in the House of Representatives, setting up a vote on final passage later in the day.
The partial shutdown has postponed releases of key jobs data on Friday along with the JOLTS report, originally expected on Tuesday.
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"I will be president for only a couple of weeks, and then I will resign," Vucic told supporters at a pro-government rally in the capital, Belgrade.
France said on Saturday it was considering taking reciprocal measures after Burkina Faso broke off diplomatic relations.
France said on Saturday it was considering taking reciprocal measures after Burkina Faso broke off diplomatic relations.
Tens of thousands of people are still unaccounted for after two powerful earthquakes struck Venezuela. At least 589 people have been confirmed dead and hundreds are believed to be trapped under rubble, as emergency crews and international rescue teams race to respond.
Japan remained on high alert Saturday as Typhoon Mekkhala approached the eastern coast after Typhoon Higos weakened into a tropical depression. Authorities warned of continued heavy rain, flooding, and landslides, according to media reports.
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ANEWZ can exclusively report that European Commission President Ursula von der Leyen is expected to visit Azerbaijan on 1 July.
Apple is facing a £3 billion lawsuit in the United Kingdom after a competition tribunal approved a major collective action over its iCloud storage service.
China has opened its market to cashew nuts from all African countries with diplomatic relations with Beijing, removing a long-standing barrier that had restricted exports from much of the world's largest cashew-producing continent.
Media leaders from across Europe gathered in Vienna this week for the annual European Publishing Congress.
Amazon founder Jeff Bezos has said artificial intelligence will ultimately lead to labour shortages rather than widespread unemployment, pushing back against growing fears that AI will replace human workers.
French department store BHV and online fast-fashion retailer Shein have ended their partnership, seven months after the launch of a permanent Shein shop in Paris triggered controversy and widespread criticism.
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