U.S. Stocks Regain Ground After Early Slump

(RTTNews) - After coming under pressure early in the session, stocks have regained ground over the course of the trading day on Tuesday. The major averages have climbed well off their lows of the session and briefly reached positive territory.

Currently, the major averages are posting modest losses. The Nasdaq is down 55.58 points or 0.3 percent at 22,491.09, the S&P 500 is down 8.33 points or 0.1 percent at 6,827.84 and the Dow is down 3.54 points or less than a tenth of a percent at 49,497.39.

The early slump on Wall Street partly reflected weakness among technology stocks, with the tech-heavy Nasdaq dropping to its lowest intraday level in almost three months.

Concerns about potential disruptions caused by the artificial intelligence buildout have recently weighed on tech stocks, which had helped lead the markets to record highs.

"Investors are increasingly questioning whether the marginal dollar spent on AI will generate the expected return," said Daniela Hathorn, Senior Market Analyst at Capital.com. "At the same time, market uncertainty is rising as new AI models frequently disrupt established players."

"With competitive dynamics evolving rapidly, it is unclear who the long-term winners will be," she added. "This uncertainty has led to underperformance across much of big tech, even as the broader market remains relatively resilient."

Selling pressure waned shortly after the start of trading, however, as traders seemed reluctant to make more significant moves ahead of release of key economic data in the coming days.

A report on personal income and spending in the month of December is likely to attract attention, as it includes the Federal Reserve's preferred readings on inflation.

The minutes of the Fed's latest monetary policy meeting may also shed additional light on the outlook for interest rates.

Sector News

Gold stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 3.9 percent.

The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, with gold for April delivery plummeting $140.70 or 2.8 percent to $4,905.60.

Considerable weakness is also visible among computer hardware stocks, as reflected by the 2.6 percent slump by the NYSE Arca Computer Hardware Index.

Housing, energy and steel stocks are also seeing significant weakness, while airline stocks have shown a strong move to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday, with many markets closed for holidays. Japan's Nikkei 225 Index fell by 0.3 percent, while Australia's S&P/ASX 200 Index rose by 0.2 percent.

Meanwhile, European stocks have moved mostly higher on the day. While the German DAX Index is up by 0.7 percent, U.K.'s FTSE 100 Index is up by 0.6 percent and the French CAC 40 Index is up by 0.5 percent.

In the bond market, treasuries have pulled back near the unchanged line after seeing initial strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.052 percent.