The Dow rose 0.2% to a new record close, while the S&P 500 slipped 0.2% and the Nasdaq declined 0.5%, as investors weighed softer consumer data against ongoing scrutiny of AI-related capital spending. December retail sales were unchanged, missing expectations for a 0.4% increase and signaling mounting pressure on lower- and middle-income consumers following the holiday season. The weaker data drove yields lower across the curve, with markets still pricing in more than two Federal Reserve rate cuts this year.
Retail stocks lagged, with Costco down 2.6% and Walmart off 1.8%. Financials also underperformed after the introduction of AI-driven advisory tools sparked competitive concerns, sending LPL Financial and Charles Schwab down 8.3% and 7.4%, respectively. The technology sector was mixed: Alphabet fell 1.8% despite strong demand for its bond offering, and chipmakers took a breather after recent gains. Partially offsetting broader weakness, Spotify jumped 14.8% on robust earnings and strong user growth.
