U.S. stocks closed mixed on Tuesday as investors reacted to softer economic data and waited for fresh signals on the health of the labor market.
The S&P 500 and the Nasdaq both ended the day lower, while the Dow Jones Industrial Average eked out a small gain to notch its third straight record close. The Dow rose 0.1%, while the S&P 500 slipped 0.33% and the Nasdaq fell 0.59%.
Markets took cues from new data showing U.S. retail sales unexpectedly stalled in December, as consumers pulled back on vehicle purchases and other big-ticket items. The flat reading missed expectations for modest growth and raised concerns about the pace of consumer spending heading into the new year.
Technology stocks weighed on the broader market, particularly in the communication services sector. Alphabet shares fell after the company announced a $20 billion bond sale, adding to investor unease about how much big tech firms plan to spend to support artificial intelligence. Companies including Amazon, Meta, Microsoft and Alphabet are expected to pour hundreds of billions into AI infrastructure in 2026.
At the same time, hopes for a more accommodative Federal Reserve ticked higher. Traders slightly increased their bets on a potential rate cut in April, though most still expect the Fed to hold steady until mid-year. Investors are now focused on the upcoming U.S. payrolls report, which could reshape expectations around interest rates.
Away from tech, several individual stocks made sharp moves. Spotify jumped after issuing an upbeat forecast, while Marriott surged on strong projections tied to higher spending by affluent travelers. Coca-Cola, meanwhile, slipped after missing revenue expectations.
With major indexes hovering near record levels, investors appear cautious, balancing solid earnings against economic uncertainty and policy risks still ahead.
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