Investing.com -- U.S. stocks slipped in choppy trading on Tuesday, with the blue-chip Dow Jones Industrial Average turning negative amid a flurry of quarterly results from some of its components. The technology sector was under pressure amid concerns over Chinese competitors to U.S. artificial intelligence firms.
Meanwhile, oil prices were muted while the U.S. bond market saw a mixed performance, as fixed-income traders returned from the Columbus Day holiday.
At 13:53 ET (17:53 GMT), the benchmark S&P 500 dipped 0.2% to 7,793.66 points, while the tech-heavy NASDAQ Composite shed 0.3% to 27,164.40 points. The Dow was now down 0.5% to 51,594.35 points.
Memory names nursing losses
The S&P 500 technology sector cut some losses but remained largely subdued, last down 0.2%. Micron Technology extended its decline and was set for a four-day losing streak, in part due to reports of advances made by China's ChangXin Memory Technologies, fueling worries that the gap in the AI race between U.S. firms and their Chinese counterparts might be narrowing.
Earlier, in Asia, South Korea's benchmark KOSPI, which is heavily weighted towards technology and semiconductor stocks, slid 5.5%.
Intel top boss Lip-Bu Tan on Monday at the DBS Asia Future Forward Conference talked about China's lower costs.
"You talk about China's lower cost of tokens, that is true. Right now, for example, in a U.S. company, we try to deploy the AI, and the token cost, if you don't control, it's out of control. And so the token for China frontier model is much much lower and the adoption is very fast," he said.
At the same event, Broadcom CEO Hock Tan touched upon investment in AI. "Most companies out there cannot find any bloody return on investment (on AI). I'm telling you, people are just wasting money, spending tokens, trying to understand," he said.
According to Reuters, Tan also said: "A lot of investors have no clue what they're investing in, but set very extreme expectations, only to find out that it's almost like they are in a casino gambling."
JPMorgan leads bank earnings
Wall Street's attention on Tuesday was on a heavy earnings slate, highlighted by quarterly reports from four of the top five U.S. banks by consolidated assets.
JPMorgan posted a surprise miss on quarterly profit estimates, as the number-one lender was hit by a drop in fixed-income markets revenue for the first time since Q1 2024. But shares reversed losses after the banking behemoth raised its full-year 2026 net interest income guidance to approximately $106.2 billion from about $105.5 billion previously.
"The U.S. economy continued to be fueled by strong business investment and ongoing consumer spending. However, large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface," JPMorgan chief executive Jamie Dimon said in a statement.
JPMorgan stock has since given up gains, last down 0.1%.
Citi, the number-three U.S. bank by consolidated assets, delivered a quarterly top- and bottom-line beat, with net income jumping 40% Y/Y to $5.25 billion. CEO Jane Fraser said the lender's quarterly revenue was the best in a decade. However, shares of Citi shed 4.1%.
Not finding the right stocks? Our AI's list of investor-grade stock picks for October just dropped »
Moving to Wells Fargo, the number-four U.S. lender notched a 5% increase in quarterly net interest income, helped by higher loan and investments securities balances. Still, the stock dipped 2.1%.
"While economic uncertainty exists and consumer sentiment remains mixed, our data shows that our consumer and business customers are doing well. Consumers are spending more, loan delinquencies are low, and deposit and investment balances have grown. Businesses continue to have strong balance sheets and losses remain low," Wells Fargo top boss Charlie Scharf said in a statement.
"While higher interest rates, higher oil prices and persistent inflation create risks to the economy, strong positive forces such as the investment in AI infrastructure, high employment levels and consistent wage growth continue to outweigh the risks," he added.
Finally, Goldman Sachs beat quarterly top- and bottom-line estimates on the back of strength in its trading and investment banking businesses. But shares in the number-five U.S. bank pared some gains, last up 0.2%.
UnitedHealth reverses course, J&J slides
Away from U.S. banks, Tuesday's earnings calendar also saw quarterly updates from UnitedHealth and Johnson & Johnson, both components of the Dow 30.
Shares of the health insurance giant initially rose after it raised its full-year adjusted profit guidance and reported a Y/Y decrease in its medical care ratio - or the percentage of insurance premiums spent on medical care. UnitedHealth stock later gave up gains and had inched 0.2% lower.
Johnson & Johnson slipped 6%, after the drugmaker's quarterly top- and bottom-line beat was overshadowed by sales growth in its medical devices business that fell short of management's expectations.
Beyond healthcare, shares of Domino's Pizza declined 3.4% after the world's largest pizza chain said quarterly U.S. same store sales increased just 0.3%.
Earnings season critical for Wall Street amid ructions in oil, yields
The earnings deluge coming up over the next few weeks will be a test for risk sentiment, as a strong underlying earnings story has been one of the main reasons for Wall Street's march to record levels this year despite a historic U.S. bond market sell-off and the swings in oil prices caused by the Middle East war.
U.S. Treasury yields were mixed on Tuesday after the Columbus Day holiday. The benchmark 10-year yield extended losses from last week, falling 2.5 basis points to 5.221%, while the 30-year yield followed suit, losing 3.2 basis points to 5.567%. The shorter-end, more rate-sensitive 2-year yield rose 1.9 basis points to 4.810%.
Looking at geopolitics, oil prices were also mixed, with Brent crude futures, the global benchmark, dropping 0.8% to $105.86 a barrel while U.S. West Texas Intermediate crude futures climbed 0.4% to $94.14 a barrel.
The moves came after Russia said its diesel exports may exceed volumes announced under a supply deal with the U.S., countering fears over Gulf supply flows. A crude price surge on Monday, triggered in part by fresh strikes on Saudi infrastructure by Houthi rebels in Yemen, threatened to reinforce inflationary pressures.
Traders will have the chance to parse through September consumer price index data on Wednesday, which could offer insight into both the state of inflation and the outlook for Federal Reserve monetary policy. The Fed is widely tipped to keep interest rates steady at its upcoming meeting this month, after the central bank lifted borrowing costs for the first time since 2023 in September.
Ayushman Ojha and Scott Kanowsky contributed to this article
Original Article
U.S. stocks slip slightly on tech weakness; Dow turns negative amid bank earnings
Ancora builds Big Yellow Group stake and pushes to explore sale, Bloomberg reports
CVS agrees to $315M DOJ settlement, enhanced DEA prescription oversight
