The Nasdaq finished Tuesday at a record high as Micron Technology, SanDisk and other artificial intelligence-related stocks advanced, while the S&P 500 remained just short of its peak amid oil near $100 a barrel, elevated Treasury yields and expectations surrounding interest rates and U.S.-China talks.
By yourNEWS Media Newsroom.
The Nasdaq Composite closed at a record Tuesday as investors continued buying semiconductor and artificial intelligence-related shares, overcoming declines across several consumer-facing technology companies that came under pressure over concerns about the expanding capabilities of Meta Platforms’ new AI assistant.
Preliminary closing data showed the Nasdaq gaining 121.15 points, or 0.45%, to 27,243.24. The S&P 500 slipped 0.43 points, or 0.01%, to 7,764.27, leaving the benchmark less than 1% below its Aug. 13 record close. The Dow Jones Industrial Average declined 184.94 points, or 0.36%, to 51,863.89.
Micron Technology and SanDisk were among the memory-chip companies advancing as enthusiasm surrounding artificial intelligence continued to support semiconductor stocks.
Much of the latest attention has centered on Meta’s AI assistant, Muse, which was introduced this month with the ability to perform tasks for users including sending emails and completing transactions. Its early reception has helped support companies tied to the computing infrastructure required for increasingly capable AI systems.
At the same time, investors are weighing how autonomous AI assistants could affect businesses that depend on consumers directly visiting their websites, applications or digital platforms.
Amazon blocked Muse from shopping on its platform Monday, highlighting growing questions about how retailers and other companies will respond as AI agents increasingly act on behalf of individual users.
“There are a lot of tech stocks that are down today on Muse-related fears of one sort or another,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “People fear that Muse will be used to manage your insurance relationships, book your travel and search for stuff to buy.”
Companies potentially exposed to that shift were among Tuesday’s decliners. Ride-hailing companies Uber Technologies and Lyft lost ground, while online travel company Expedia and financial services company Charles Schwab also fell.
The divergent moves illustrated an emerging split within the technology sector. Semiconductor companies supplying memory, processors and other infrastructure used in AI systems have benefited from expectations of expanding demand, while companies that rely on direct consumer relationships face questions about whether increasingly autonomous AI assistants could insert themselves between businesses and their customers.
Broader markets also contended with geopolitical and interest-rate pressures.
Crude oil traded unevenly around $100 a barrel as investors monitored the conflict in the Middle East. Oil markets remained sensitive to the possibility of further disruptions following President Donald Trump’s remarks Tuesday at the United Nations General Assembly, where he warned that he could “annihilate the Islamic Republic” if an agreement is not reached to end the conflict.
Treasury yields remained elevated alongside oil prices. The yield on the benchmark 10-year U.S. Treasury note traded near 4.94%, maintaining pressure on portions of the equity market that are sensitive to borrowing costs and interest-rate expectations.
Investors were also preparing for a U.S.-China summit scheduled for Thursday. Market participants have been considering whether the existing trade truce with Beijing could be extended and whether negotiations might expand to include rules governing artificial intelligence.
“What people are looking for is at least the start of a conversation that maybe you can come up with some sort of global framework as opposed to fighting each other and having this race and so,” said Joe Saluzzi, head of equity market structure research at Themis Trading.
The strength in technology shares comes as corporate earnings expectations have increased, particularly for major companies tied to artificial intelligence.
Despite trading close to record territory, the S&P 500 was valued at slightly less than 19 times expected earnings, its lowest valuation multiple since 2023. AI-related market heavyweights have accounted for a substantial portion of the recent improvement in projected earnings.
Financial stocks provided another source of weakness Tuesday. JPMorgan Chase and Wells Fargo both declined.
Investors were simultaneously assessing the outlook for Federal Reserve policy following last week’s interest-rate increase.
Boston Federal Reserve President Susan Collins said in written remarks that she supported the increase because of continued inflation risks.
New York Federal Reserve President John Williams separately said the central bank’s operating framework for controlling short-term interest rates has functioned effectively in supporting financial markets.
Traders placed a 53% probability on the Federal Reserve raising interest rates by at least another 25 basis points in October, according to the CME Group’s FedWatch Tool.
The combination of higher borrowing costs, oil prices near $100 and geopolitical uncertainty created pressure across portions of the market Tuesday. Those concerns were outweighed on the Nasdaq by continued demand for companies positioned to benefit from artificial intelligence investment, allowing the technology-heavy index to establish another record closing high.
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