US stocks traded without a clear direction on Tuesday as investors weighed a fresh round of corporate earnings alongside weaker-than-expected retail sales data, which kicked off a busy week of economic releases. The S&P 500 and the Nasdaq Composite hovered near flat levels, while the Dow Jones Industrial Average climbed to a new record high.
The communication services sector weighed on the S&P 500, pressured by a 1.8% drop in shares of Alphabet. The tech giant said it had issued $20 billion in bonds through a seven-part offering.
Investor concerns around Big Tech spending intensified after recent megacap earnings reports. Amazon, Meta, Alphabet and Microsoft are collectively expected to spend around $650 billion as they compete for dominance in artificial intelligence.
Economic data also drew attention after US retail sales unexpectedly showed no growth in December, missing expectations for a 0.4% increase. The weaker reading raised concerns that consumer spending and overall economic momentum may be slowing as the new year begins.
“The retail sales data coming in below expectations suggests the economy may not have been as strong as previously thought during the fourth quarter,” said Charlie Ripley, vice president of portfolio management at Allianz Investment Management.
Later this week, markets will focus on delayed nonfarm payrolls data, followed by key inflation figures that could shape expectations for future Federal Reserve policy decisions.
White House economic adviser Kevin Hassett said US job growth could slow in the coming months due to weaker labor force expansion and rising productivity driven by artificial intelligence.
Markets currently expect the Fed to keep interest rates unchanged until June, when President Donald Trump’s nominee for Fed chair, Kevin Warsh, could take over, pending Senate confirmation.
By late morning trading, the Dow was up 237 points, or 0.47%, at 50,373, the S&P 500 edged up 0.04% to 6,967, and the Nasdaq slipped 0.08% to 23,220.
Gains in Goldman Sachs and Home Depot helped lift the Dow, offsetting a sharp decline in Coca-Cola after the drinks maker missed fourth-quarter revenue expectations.
“We’re seeing a continued rotation into a broader range of sectors and regions, which is generally a healthy development,” said Bill Fitzpatrick, managing director and portfolio manager at Logan Capital Management.
This shift away from high-priced technology stocks and into other areas of the market has supported the Dow, which recently broke above the 50,000 level for the first time, as well as small- and mid-cap shares.
Software stocks continued to recover from last week’s selloff, with the S&P 500 software index rising 1.3%. Shares of Datadog surged nearly 16% after the firm beat quarterly earnings expectations.
Consumer discretionary stocks gained 1.2%, supported by advances in Tesla and Marriott. Marriott jumped 9% following the release of its fourth-quarter results.
Shares of S&P Global fell 6.3% after issuing a 2026 profit outlook below analyst estimates. Peers Moody’s, FactSet and MSCI also moved lower.
Meanwhile, Spotify shares jumped 15% after the company forecast first-quarter earnings above expectations, supported by strong user growth and recent price increases.
Market breadth was positive, with advancing stocks outnumbering decliners by nearly two-to-one on the NYSE and by a 1.6-to-1 ratio on the Nasdaq.
The S&P 500 recorded 54 new 52-week highs and 10 new lows, while the Nasdaq Composite posted 82 new highs and 75 new lows.
