AI might come for financial firms next — and a weak U.S. retail report weighs on stocks

What can’t artificial intelligence claim to do nowadays? Tech platform Altruist announced Tuesday a tool to help users carry out tax planning — an act, as everyone knows, more complex than quantum physics — within “minutes.”

Financial stocks wobbled on those claims as investors feared AI tools could replace — or at least lower the value of established advisory firms and banking names. LPL Financial lost 8.3%, Charles Schwab tumbled 7.4% and Morgan Stanley dropped 2.4%.

Investor sentiment was further depressed by downbeat U.S. economic data. In December, seasonally adjusted retail sales were flat month on month, falling short of the 0.4% increase expected by a Dow Jones survey of economists. Those figures might not have disappointed just Wall Street — but also folks who were expecting more for Christmas.

A weak retail report also casts a shadow on the nonfarm payrolls count for January, which comes out Wednesday morning stateside. After all, it’s hard to shop with a shaky job.

Weighed by the above developments, major U.S. benchmarks mostly fell. The S&P 500 lost 0.33% and the Nasdaq Composite retreated 0.59%. The Dow Jones Industrial Average, however, eked out a 0.1% gain to hit another closing record. The market has shown “a rotation into other areas that may be more insulated from that AI trade,” Anthony Saglimbene, Ameriprise Financial’s chief market strategist, told CNBC. 

Over in Asia, signs of regional economic health will come from China’s consumer and producer price indexes for January, releasing later today. On the earnings front, Singapore bank DBS reported on Tuesday fourth-quarter net profit that missed expectations, while CapitaLand Investment reports today, with its CFO going on “Squawk Box Asia” to discuss the Singapore asset management firm’s performance.

— CNBC’s Michelle Fox contributed to this report.

Alphabet is planning a debt sale again, with the company close to finalizing a global bond issuance in excess of $30 billion, according to two people familiar with the deal. That’s comes after it raised $20 billion on Monday.

Ford reports its largest miss in quarterly earnings in four years. The automaker’s earnings per share for the last three months of 2025 was 13 cents adjusted, 32% below the 19 cents expected by analysts — largely because of unexpected tariff costs.

Alibaba launches an AI model for robotics. Named RynnBrain, it is designed to help robots comprehend the physical world around them and identify objects. Robotics falls under the umbrella term dubbed “physical AI,” which includes machines that rely on AI.

The Dow notches another record close, but other major U.S. indexes fell Tuesday on a disappointing retail sales report and financial stocks coming under pressure. Europe’s Stoxx 600 dipped 0.07% amid earnings from Philips, BP and Kering.

[PRO] Buy the dip in gold, Wells Fargo wrote in a Monday note to its clients, adding that it expects the precious metal to stabilize. Here’s where the bank sees gold heading to by the end of 2026.

UK’s latest political standoff threatens to put a ‘Damocles sword’ over Britain’s bond market, investors warn

Pressure is mounting on U.K. Prime Minister Keir Starmer amid criticism of his decision in 2024 to appoint Peter Mandelson as ambassador to the U.S. despite Mandelson’s links to disgraced financier and sex offender Jeffrey Epstein.

Government borrowing costs jumped on Monday, as key members of Starmer’s team quit and a senior politician from his own Labour Party called on him to go. The prospect of a leadership challenge poses a significant risk to gilt investors, market watchers said.

— Chloe Taylor