Wall Street opens mostly lower as AI investment concerns return

Wall Street’s main share indexes opened mostly lower on Tuesday as renewed concern over the cost and long-term profitability of artificial-intelligence investments weighed on technology stocks. The pullback came ahead of quarterly results from major technology companies this week, which investors will scrutinise for signs that AI spending is generating returns. [1]

The Dow Jones Industrial Average was up 0.2 per cent shortly after the opening bell, while the S&P 500 fell 0.2 per cent and the Nasdaq dropped 0.6 per cent. [1]

The latest worries followed a weak market debut in Seoul for South Korean data-centre company Elice, whose shares lost about a third of their value on its first day of trading. US data-centre operator CoreWeave, already under pressure over concerns about its debt, fell 2.5 per cent. [1]

The Nasdaq had risen 1.1 per cent on Monday after losing 4.5 per cent over the previous week, its biggest weekly decline since June. Investors had become increasingly concerned that higher interest rates could hamper investment in AI infrastructure, particularly by data-centre companies. [1]

Meta Platforms, IBM and Tesla were due to report results on Wednesday. Attention is expected to centre on whether large technology companies’ substantial AI investments are beginning to pay off. [1]

Elsewhere, General Motors shares fell 5.6 per cent despite the carmaker reporting better-than-expected quarterly sales and profit, raising its full-year earnings forecast and announcing plans to buy back $20bn of its shares over the coming years. Industrial group 3M rose 3.3 per cent after beating quarterly expectations and raising its annual earnings forecast again. [1]