S&P500 and NASDAQ end lower on weak retail sales data; Dow Jones jumps 55 points

The US markets edged lower on Tuesday after selling in tech stocks pulled the S&P500 and the NASDAQ lower. Dow Jones managed to close in green and at fresh record high levels, despite paring the majority of the intraday gains on Tuesday. The NASDAQ closed 0.59% lower to 23,102, the S&P500 fell 23 points to 6,941, and the Dow Jones rose by 55 points to 50,188.

The investor sentiment was influenced by weaker-than-expected retail sales data. According to the data released by commerce department, the retail sales for December remained unchanged vs the expectations of 0.4% growth and 0.6% revised data for November.Investors believed the weaker data raised the hopes for Federal Reserve rate cuts.

Jobs data

Investors will also be closely monitoring the non-farm payrolls data, which is set to be released late tonight. White House economic advisor Kevin Hassett said on Monday that the lower jobs data indicates the impact of Trump’s immigration policies and Artificial Intelligence increasing productivity. Experts believed weaker-than-expected print for jobs data could further add fuel to the hopes of more rate cuts this year.

Tech stocks

The megacap companies continued to receive investor fury over record AI spending. Shares of Alphabet dropped 1.8% after the company announced raising $20 billion in debt to support the AI infrastructure capex. Meanwhile, the rout in software stocks continued to fall as new AI tools could upend their traditional business models. The S&P500 Technology index fell 0.6% on Tuesday.

US Dollar

The US dollar fell below 97 on weaker retail sales data and ahead of the crucial jobs report. The dollar also fell amid the rising fears of lower demand for US treasuries after the Chinese regulatory authorities warned financial institutions to reduce their exposure to the US debt. Consequently, the Chinese Yuan is set for the best monthly gain against the US dollar since 2023.