US stock markets today: Dow rises, Nasdaq falls as chip sell-off fuels fresh concerns over AI spending

US markets opened on a mixed note on Tuesday as a sharp sell-off in Asian semiconductor stocks weighed on technology shares, overshadowing support from lower oil prices and a steady stream of corporate earnings. The Nasdaq Composite, which is heavily weighted towards technology companies, slipped in early trading, while the broader S&P 500 remained largely flat. The Dow Jones Industrial Average outperformed, helped by gains in non-technology sectors and positive earnings sentiment.Investor attention was drawn to a steep decline in South Korea’s stock market, where shares of major memory chip manufacturers came under intense pressure. The benchmark Kospi index recorded a sharp fall as investors sold holdings in semiconductor giants SK Hynix and Samsung Electronics, both of which posted double-digit losses during the session.

The weakness in chip stocks spilled over into global technology markets, raising concerns about the sustainability of the massive investments being made across the artificial intelligence ecosystem.
Market sentiment has become more cautious amid growing scrutiny of how AI expansion is being financed.

Reports suggesting deeper financial ties between leading AI companies and their technology partners have prompted questions over whether some of the industry’s growth is being supported by interconnected funding arrangements rather than end-user demand alone.Adding to investor unease is the rapid progress being made by Chinese AI developers. The emergence of lower-cost alternatives has renewed debate over whether the billions of dollars being invested in data centres, advanced chips and AI infrastructure will generate the expected returns.

The focus is also turning to the US Federal Reserve, which begins its two-day policy meeting on Tuesday. While investors broadly expect policymakers to keep interest rates unchanged, uncertainty remains elevated as markets assess the central bank’s outlook on inflation and economic growth.

Meanwhile, Apple continued to reinforce its dominance among global technology companies. The iPhone maker recently overtook Nvidia to become the world’s most valuable listed company and has now crossed the $5 trillion market capitalisation milestone.