Dow Jumps 530 Points as Investors Rotate Into Healthcare on AI Spending Doubts

The Dow Jones Industrial Average rose 529.85 points, or 1.02%, to close at 52,495.88 on Tuesday, outperforming the tech-heavy Nasdaq as investors rotated out of AI-linked technology stocks into healthcare and small caps. The S&P 500 gained 0.28% to 7,712.57, while the Nasdaq slipped 0.02% to 26,424.82. The S&P 500 healthcare index hit a record high, with Eli Lilly (LLY-US) contributing the most points to the S&P 500. UnitedHealth (UNH-US), Merck (MRK-US) and Johnson & Johnson (JNJ-US) also lifted the Dow. The Russell 2000 small-cap index rose 1.7%. Technology stocks fell 0.3%, the biggest drag on the S&P 500. Plante Moran Financial Advisors CIO Jim Baird said investors remain concerned about whether AI companies can convert heavy capital spending into profit. 3M (MMM-US) jumped 5.8% after expanding its data center partnership with Amazon (AMZN-US) and raising full-year guidance. Hasbro (HAS-US) rose 11.2%, Equifax (EFX-US) gained 11.3%, and General Motors (GM-US) fell 6.8%. Netflix (NFLX-US) dropped 1.7% in the session and a further 6% after hours on weak fourth-quarter guidance.