U.S. stocks opened weaker as investors pushed aside tariff worries and refocused on earnings and artificial intelligence.
The tech-heavy Nasdaq and S&P 500 were weighed by big tech. Google parent Alphabet beat quarterly earnings estimates after Tuesday’s close, but its overall sales and Google Cloud revenue both were weaker than analysts’ forecasts. However, it said it would spend more than Wall Street expected on AI. Alphabet shares were down 8%.
Meanwhile, chip company AMD said its data center revenue, a proxy for AI sales, fell short of expectations in the last three months of the year and it expected current quarter sales to drop 7% from that. AMD lost almost 9%. Apple also was under pressure, down 1.25%, after Bloomberg News reported that China’s antitrust regulator was preparing for a possible investigation of the iPhone maker.
Around 10:05 AM ET, the Nasdaq was down 0.75%, or 147.20 points, to 19,506.81; the broad S&P 500 fell 0.49%, or 29.77 points, to 6,008.11; and the blue-chip Dow was off 0.40%, or 180.36 points, to 44,375.68 The benchmark 10-year yield eased to 4.422%.
Big tech declines
Alphabet raised its AI spending forecast, but some analysts are still concerned about how these big-spending companies can monetize AI, especially after China’s DeepSeek said last week it had built an AI model rivalling ChatGPT and OpenAI at a fraction of the cost.
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“In a period when we have seen AI supposedly become less capital intensive with the introduction of DeepSeek, Alphabet has committed a 43% increase in capital expenditure for 2025,” said Ben Barringer, technology analyst at Quilter Cheviot, an investment management company. “This is great news for the likes of Nvidia, but for Alphabet we are yet to see a real return on investment on AI spend, so there is a risk that it could be money not being well spent and disappear into a virtual black hole.”
Additionally, Alphabet’s weak growth in its cloud business sparks “worry that the company is falling behind slightly in the AI arms race that continues apace,” Barringer said.
Corporate news
Other major movers included:
- Ride-share firm Uber’s quarterly operating income significantly undershot expectations, pushing the stock down 7%
- Chipotle beat earnings expectations in the last few months of the year but its same-store sales were lower than Wall Street predictions. It also cut its sales outlook for the year. Shares of the fast casual burrito chain dropped 4.24%.
- Electronic Arts topped earnings estimates, and the software maker’s shares added 4.8%.
- Entertainment company Disney beat earnings forecasts but subscribers to its Disney+ streaming channel slipped and is forecast to fall further in the current three-month period. Disney shares are fractionally lower.
- Social media company Snap surprised analysts with a profit and higher-than-expected sales.
- Match, parent of the Tinder dating app, replaced its chief executive and reported an earnings miss. Snap shares lost 5.5%.
- Mattel’s shares jumped 17.6% after the toy maker forecast strong earnings this year on demand for Barbie dolls.
Bitcoin
Bitcoin edged up after David Sacks, the newly appointed White House AI and crypto czar, said one of his first focuses will be developing a regulatory framework for stablecoins. He thinks legislation will get passed in the next six months.
Stablecoins are a type of cryptocurrency whose value is pegged to a real-world asset, such as the U.S. dollar.
He also told CNBC on Tuesday his new task force is evaluating and considering“the feasibility of a bitcoin reserve,” which President Donald Trump suggested during his campaign.
Separately, the Securities and Exchange Commission said on Tuesday it’s soliciting input from the public to discuss cryptocurrencies.
Bitcoin was last up 0.52% at $98,443.59.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
