#us-markets

#us-markets

After a slow start on Tuesday, all the major indices began to rally by noon and finished well in the green by the close. The initial downturn was sparked by news that Alphabet Inc. (NASDAQ: GOOG) was in talks with Meta Platforms Inc. ( NASDAQ: META) to sell them its custom AI chips. Google's own specialized chips, called Tensor Processing Units (TPUs), are optimized for AI and machine learning workloads and are typically used in its own data centers. NVIDIA Inc. ( NASDAQ: NVDA) was down almost 3% by the close on the news, which started the early selling, and while the rest of the indices recovered, the chip giant finished the day in the red.

Since the end of the pandemic, consumers have proved to be the backbone for the American economy-much to the surprise of some of Wall Street's biggest names. This underlying strength has pushed the U.S. stock market to record highs this year, with analysts pricing in continued growth of the S&P 500. But the ever-reliable consumer is beginning to look shaky, courtesy of an unpleasant mix of a stagnating jobs market and sticky inflation.

President Trump announced a 25% trade tariff on all imports from Japan and South Korea, which are key suppliers of autos, electronics, and steel.

The Dow Jones rose 396 points, for a 1% gain, on Tuesday, as investors mostly rotated out of the tech sector, favoring the 30-company index.