After dropping as much as 1.5% at its lows of the session, the S&P 500 information technology sector erased declines to close up 0.5% as gains in Nvidia and Apple overcame declines in Microsoft and Oracle .

Worries about artificial intelligence disrupting business models had sparked a selloff in software firms, brokerages and trucking companies the previous ‌week, leading to Wall ⁠Street’s three main ⁠indexes to record their biggest weekly decline since mid-November.

“There’s a lot of different trends going on in terms of where investors want to put money right now and you see that in this market where you just see spikes up and spikes down, on maybe not a daily basis, but on a regular basis,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

“The market is looking very short-term here and there will be a return to AI plays being very much in favor.” Potential risks from Chinese AI players exacerbated the uncertainty. On Monday, Alibaba unveiled a new AI model, Qwen 3.5, designed to independently execute complex tasks.

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Even with the rebound in technology names, software stocks remained under pressure, with the S&P 500 software index ending down 1.6% with Intuit and Cadence Design the worst-performing in the index on ⁠the day with declines ‌of more than 5%.
The Dow Jones Industrial Average rose 32.26 points, or 0.07%, to 49,533.19, the S&P 500 gained 7.05 points, or 0.10%, to 6,843.22 and the Nasdaq Composite gained 31.71 points, or 0.14%, to 22,578.38. The S&P 500 financials index was among the best-performing of the 11 major ⁠S&P sectors on the day. Gains in banks such as Goldman Sachs and JPMorgan Chase helped nudged the Dow into positive territory from a decline of 0.7% earlier in the session. Consumer staples, down 1.5%, was the worst-performing S&P 500 sector on the session, dragged lower by a 7% tumble in General Mills after the cereal maker cut its annual core sales and profit forecasts.

This week, the personal consumption expenditure report – the U.S. Federal Reserve’s preferred inflation gauge – will be in focus for insights into inflation and how it could impact the central bank’s rate-cut trajectory. The data follows cooler-than-expected consumer inflation data last week that slightly raised bets on interest-rate cuts this year.

Traders are pricing in a chance of roughly 63% for a rate cut of at least 25 basis points at the Fed’s June meeting, the first with odds above 50%. Chicago Fed President Austan Goolsbee said the Fed could approve “several more” ‌interest-rate cuts this year if inflation resumes a decline to the central bank’s 2% target, while Governor Michael Barr said that another central bank interest rate cut could come somewhere well down the road amid ongoing risks to the U.S. inflation outlook. In addition, San Francisco Fed President Mary Daly said the central bank must do a deep dive ⁠into the data to determine whether AI is lifting productivity growth and in turn, economic growth, without rekindling inflation that would force tighter monetary policy. Norwegian Cruise Line shares rallied 12.1% as the best performer on the S&P 500, after activist investor Elliott said it had built a more than 10% stake in the cruise operator. Fiserv’s shares jumped 6.9% after the Wall Street Journal reported that activist investor Jana Partners had taken a stake in the payments company. Masimo shot up 34.2% after Danaher said it would acquire the pulse-oximeter maker for $9.9 billion, including debt, sending Danaher shares 2.9% lower.

Advancing issues outnumbered decliners by a 1.02-to-1 ratio on the NYSE while declining issues outnumbered advancers by a 1.07-to-1 ratio on the Nasdaq.

The S&P 500 posted 42 new 52-week highs and 10 new lows while the Nasdaq Composite recorded 81 new highs and 224 new lows.

Volume on U.S. exchanges was 17.76 billion shares, compared with the 20.7 billion average for the full session over the last 20 trading days.

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The yen was steady after data showing a rebound in Japanese manufacturer sentiment and President Donald Trump announced the first tranche of mega-investments Tokyo is making in the U.S. The kiwi held gains before a decision by the Reserve Bank of New Zealand, which is widely expected to hold on rates.

Iran said ‌progress had been ⁠made ⁠in nuclear talks with the U.S. in Geneva, while peace negotiations between Ukraine and Russia continued. With many markets in Asia remaining closed for Lunar New Year holidays, investor focus remained on the Fed’s readout of its last meeting and key U.S. economic data due on Friday.

“Weaker risk sentiment, because of concerns around renewed geopolitical tensions in the Middle East and volatility in U.S. equity markets, briefly supported the USD,” Samara Hammoud, a currency strategist at Commonwealth Bank of Australia, wrote in a note. “However, reports that the U.S. and Iran made progress ⁠and reached ‌a ‘general agreement’ during nuclear negotiations in Switzerland helped ease those concerns.”

The dollar index, which measures the greenback against a basket of currencies, was little changed at 97.11 after a two-day advance. The ⁠euro was steady at $1.1852.

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The yen strengthened 0.1% to 153.12 per dollar. Sterling held at $1.3563, after a 0.5% slide in the previous session.
Iran and the U.S. reached an understanding on the main “guiding principles” in a second round of indirect talks over their nuclear dispute on Tuesday, although a deal is not imminent, Iranian Foreign Minister Abbas Araqchi said. Elsewhere in Geneva, negotiators from Ukraine and Russia concluded the first of two days of U.S.-mediated peace talks in Geneva, with Trump pressing Kyiv to act fast to reach a deal to end the four-year conflict.

The Fed’s Open Market Committee issues minutes ‌from its January meeting later on Wednesday, while the Commerce Department on Friday will issue its first estimate for U.S. gross domestic product for the fourth quarter.

In Japan, data showed exports rose for a fifth consecutive month in ⁠January, while the Reuters Tankan poll showed that confidence among the nation’s manufacturers improved in February for the first time in three months.

The International Monetary Fund urged Japan to keep raising interest rates and avoid loosening fiscal policy further. The Trump administration announced three projects valued at $36 billion to be financed by Japan, the first of some $550 billion in projects Tokyo agreed to undertake in order to lower U.S. tariffs.

The Australian dollar was steady at $0.7083, while the kiwi traded little changed at $0.6047. New Zealand’s first female central bank chief Anna Breman chairs her debut meeting on Wednesday, with rates widely expected to stay on hold.

In cryptocurrencies, bitcoin fell 0.08% to $67,597.50, while ether declined 0.18% to $1,995.63.

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Americans set a new record for domestic air travel in 2025 even as travel patterns shifted, a new analysis found.

AAA Northeast examined several years of Transportation Security Administration (TSA) checkpoint data and found that over 904 million travelers went through a TSA checkpoint last year, an increase of 2.57 million passengers compared with 2024.

That figure marks a new annual record for domestic air travel, though the year-over-year increase was under 1% growth – much cooler than in prior years.

By comparison, the number of passengers going through TSA checkpoints was up 5.3% in 2024 from 2023, which had a 13% growth from 2022.

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AAA Northeast found that 2025 set a record for domestic air travel, though the rate of growth slowed. (Matthew Hatcher/Bloomberg via Getty Images)

Fewer travelers flew on Mondays and Tuesdays in 2025, with passenger volume declining by 0.39% and 3%, while more travelers caught flights on Thursdays and Sundays with growth of 1.89% and 1.87%, respectively.

AAA’s report noted that the data could reflect “softness in business travel early in the workweek and continued strength in leisure travel, which tends to occur closer to weekends.”

The data also showed that 2025 had lower passenger volumes in the first part of the year when compared with 2024, with four of the first six months of last year showing declining growth compared with 2024.

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The number of extremely busy travel days increased in 2025 despite the modest year-over-year increase in overall travel. (Reuters/Maja Smiejkowska)

January 2025 saw passenger volumes rise by 1.75%, though February experienced a 2.97% decline. A 0.17% decline in March and 0.23% gain in April were followed by declines of 1.48% in May and 0.45% in June.

Passenger volumes rebounded around the Fourth of July holiday, with the month of July seeing 1.16% growth, and the momentum carried over through October when volumes were up 3.63% year-over-year.

The holiday travel season was slightly slower in 2025 than in 2024, as volumes were down 0.15% in November and 0.08% in December. AAA suggested the decline could’ve been due to the effects of the government shutdown, although it added that travel during the actual shutdown was 2.2% higher than the prior year after a 6.2% decline in the final shutdown’s final week.

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The holiday travel season was slightly slower in 2025 than in 2024, AAA Northeast reported. (Tayfun Coskun/Anadolu Agency via Getty Images)

AAA also noted that there was an uptick in the number of extremely busy days with over 3 million passengers passing through TSA checkpoints. 

There were eight such days in 2025, as May 23, June 22, July 6, July 13, July 20, July 27, Oct. 10 and Nov. 30 all saw passenger volumes top 3 million. By contrast, there were only two such days in 2024: July 7 and Dec. 1.

TSA also set the record for largest passenger volume twice in 2025: June 22 had 3.09 million passengers screened, while Nov. 30 broke the new record with 3.13 million passengers.

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