S&P 500, Nasdaq slip on AI concerns; Dow closes at record as futures edge higher

US markets closed mixed on Tuesday, February 10, with the S&P 500 and Nasdaq Composite ending lower after a weaker-than-expected retail sales data weighed on sentiment, while concerns around the impact of artificial intelligence on parts of the financial sector added pressure on stocks. The Dow Jones Industrial Average, however, eked out modest gains to register another record close.

The S&P 500 slipped 0.33% to end at 6,941.81, and the Nasdaq Composite declined 0.59% to 23,102.47. In contrast, the Dow rose 52.27 points, or 0.10%, to settle at a fresh closing high of 50,188.14, after marking its third straight intraday record earlier in the session. The blue-chip index crossed the 50,000 milestone for the first time last week.

Retail stocks came under pressure after data showed December retail sales were flat, missing economists’ expectations of a 0.4% rise, following a 0.6% increase in November. Shares of Costco fell more than 2%, while Walmart declined over 1%.

Financial stocks also weakened amid concerns around AI-led disruption, after technology platform Altruist unveiled a new AI-powered tax planning tool. LPL Financial dropped 8.3%, Charles Schwab slid 7.4%, and Morgan Stanley lost more than 2%.

Anthony Saglimbene, chief market strategist at Ameriprise Financial, told CNBC, “The other component of a stretched lower- and middle-income consumer right now is how they feel about the job environment, and we know that they’re a little bit more uncertain,” adding that weaker-than-expected employment data could challenge the broader market’s recent expansion.

Despite Tuesday’s pullback, Wall Street remains near record levels after tech stocks rallied over the past two sessions, helping markets recover from last week’s sell-off. The S&P 500 has reclaimed support above its 50-day and 100-day moving averages, a development that traders see as a bullish signal.

Futures tick higher, but cautiously

US stock futures edged higher late Tuesday, as investors looked ahead to the delayed January jobs report. With S&P 500 futures and Nasdaq 100 futures, both up around 0.2%, while Dow futures advanced about 94 points, or 0.2%.

The Bureau of Labor Statistics is set to release the January nonfarm payrolls data on Wednesday, after the report was postponed due to the partial government shutdown that ended on February 3.

Economists surveyed by Dow Jones expect payrolls to rise by 55,000, compared with a 50,000 increase in December, while the unemployment rate is seen at 4.4%. Markets will also watch closely for revisions to prior data, which could offer further insight into the health of the US labour market and broader economy.