US stocks: S&P 500 ends lower; AI stocks lift Nasdaq

[NEW YORK] The S&P 500 ended lower on Wednesday, pulled down by declines in JPMorgan, Blackstone and other financials, while Nvidia and Alphabet lifted the Nasdaq as investors shifted toward AI-related stocks.

The drop in the S&P 500 followed an intraday record high earlier in the session. Shares of housing acquisition companies tumbled after President Donald Trump said he was moving to ban Wall Street investors from buying single-family homes, in a bid to reduce home prices.

Blackstone and Apollo Global Management dropped, contributing to a decline in the S&P 500 financials index. American Homes 4 Rent also fell.

Real estate platform Zillow moved higher.

JPMorgan Chase fell after Wolfe Research downgraded the bank to “peer perform” from “outperform.”

Northrop Grumman and Lockheed Martin lost ground after Trump said he would not permit dividends or stock buybacks for defense companies until they fix problems with the production of military equipment. In his social media post, Trump did not mention specific companies.

Nvidia, Microsoft and Alphabet rose as investors shifted back into AI stocks following recent worries they were overvalued.

Underscoring investor appetite for heavyweight AI players, Anthropic is planning a multibillion-dollar fundraise that would value the Claude chatbot maker at US$350 billion. That would make the privately held company more valuable than the vast majority of corporations, including Advanced Micro Devices, Chevron and Wells Fargo.

“Investors have come into 2026 with a similar playbook to last year: Buy tech and forget about it. Rumors that the AI trade was done turned out not to be true,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

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Wall St opens muted after AI-driven rally; labour data in focus

Heading into fourth-quarter earnings season in the next few weeks, valuations on Wall Street remain relatively pricey. The S&P 500 is trading at about 22 times expected earnings, down from 23 in November, but above the index’s five-year average of 19, according to LSEG data.

According to preliminary data, the S&P 500 lost 23.64 points, or 0.34 per cent, to end at 6,921.18 points, while the Nasdaq Composite gained 39.30 points, or 0.17 per cent to 23,586.47.

The Dow Jones Industrial Average fell 472.60 points, or 0.96 per cent, to 48,999.39.

Data on Wednesday showed US job openings fell more than expected in November after rising marginally in October, while a separate ADP report showed that private payrolls increased less than expected in December.

While the latest labour market datasets mark a return to the standard release of economic data disrupted by the US government shutdown, they did little to change expectations of interest rate cuts from the Federal Reserve ahead of Friday’s key government payrolls report.

Investors were also monitoring geopolitical developments after the US said it seized a Russian-flagged, Venezuela-linked tanker as part of Trump’s aggressive push to dictate oil flows in the Americas and force Caracas’ socialist government to become its ally. The White House said on Tuesday that Trump was discussing options for acquiring Greenland, including potential use of the US military.

Memory and storage technology companies gave up some of their gains following a recent rally. Western Digital and Seagate Technology both fell. First Solar tumbled after Jefferies downgraded the solar panel maker’s rating to “hold” from “buy.” REUTERS