US open: Stocks gain after AI-fuelled selloff; Trump speech eyed

(Sharecast News) - US stocks rose in early trade on Tuesday following an AI-fuelled selloff in the previous session, as President Trump's new global tariffs came into effect.

At 1510 GMT, the Dow Jones Industrial Average was up 0.6%, while the S&P 500 and the Nasdaq were 0.3% and 0.5% higher, respectively.

Trump's new tariffs came into effect at the lower rate of 10% following backlash from the EU and the UK. According to reports, however, the US president is currently working on a formal order that will increase the rate to 15%.

Trump aside, worries about AI disruption continued to plague markets on Monday, with stocks on Wall Street selling off heavily after Citrini Research outlined in a note the potential AI risks to various industries.

DoorDash and American Express, both of which were mentioned in the research, tumbled.

IBM also took a hit after AI start-up Anthropic said its Claude Code can help modernise COBOL, a programming language mainly run on IBM computers.

Susannah Streeter, chief investment strategist at Wealth Club, said: "Jitters over the impact of new artificialintelligencepowered tools on some incumbents are spreading, with the cybersecurity industry now reeling from the effects. Developments released by Anthropic have been like a wrecking ball through realms of listed companies, with Claude Code Security still wreaking havoc on cyber firms.

"CrowdStrike shares fell sharply for a second session, bringing others down with it, amid worries the new tool can easily replicate some of its services. The wider economic impact is also a fear factor, given the potential for deep job losses, and labour markets have already been weakening. While this would ordinarily help lift hopes for faster interest rate cuts, sticky inflation won't make that course of action quite so easy."

On the corporate front on Tuesday, Paramount Skydance confirmed it had sweetened its bid for Warner Bros Discovery as it looks to derail an agreed takeover by Netflix but did not disclose any details.

WBD said in a statement that it was reviewing the offer. Paramount had tabled a $30-a-share offer worth $108bn, compared with Netflix's $83bn proposal.

Home Depot shares rallied after it reiterated full-year guidance as fourth-quarter trading at the US DIY chain came in ahead of expectations.

Elsewhere, shares of Advanced Micro Devices surged just over 7% after Meta Platforms said it will buy up to $60bn of AI chips from the company in a five-year deal that could see the social network giant take a 10% stake.

Telehealth firm Hims & Hers saw its shares tumble on the back of disappointing revenue guidance.

Looking ahead to the rest of the day, Trump's state of the union address will be eyed. Streeter said investors will be looking for clues about future US trade policy.

"Investors are bracing for another twist in the tariff tale," she said. "The blanket 10% global duties have come into force, but the threat of upping these to 15% is still dangling. Plus, the President and his team appear to be looking at other options in the trade arsenal, including considering imposing new tariffs under the pretext of national security on industrial sectors such as large batteries, chemicals, power grids and telecoms equipment.

"The President won't want to lose face against trade opponents, which is why relying on the TACO trade, and the expectation he'll 'chicken out', bears risks. The State of the Union address could also see Trump justify the military buildup in the Gulf and potentially a fresh attack on Iran."