US close: Stocks erase losses, but gains limited in cautious trade

17th Feb 2026 21:16

(Sharecast News) - US stocks posted meagre gains on Tuesday as investors returned to their desks after the Presidents' Day holiday in a cautious mood following recent falls.

Markets opened firmly in the red, but had mostly erased losses by lunchtime, with the Dow, S&P 500 and Nasdaq all finishing 0.1% higher.

Both the Dow and the S&P 500 notched their fourth weekly decline in five last week, while the Nasdaq logged its longest losing streak since 2022, as investors reassessed valuations in AI‑exposed names.

David Morrison, senior market analyst at Trade Nation, said there's been a "decline in upside momentum" in US markets since the beginning of February.

"Many big tech and certain AI-related stocks have taken a hit as investors continue to question the likely return on investment. The spending commitments are so large that many cash-rich corporations have halted share buybacks. [...] Meanwhile, software companies have come under scrutiny as investors question their business models given growing competition from AI," Morrison said.

"The S&P 500 remains stuck under 7,000. While there has been no significant break of support so far, investors appear wary of adding to their exposure at current levels. They seem to be sitting on their hands and waiting for a catalyst which will either provide a reason to sell or be the trigger to reload and thereby restart the bull market."

In economic data on Tuesday, the New York Empire State manufacturing index fell to 7.1 in February, according to the Federal Reserve Bank of New York, down from 7.7 in January but slightly ahead of forecasts of 7. New orders increased from 5.8 to 6.6, while shipments held steady. Unfilled orders rose to 9.1 from -8.2 and delivery times were slightly longer at 4 versus 0. Inventories increased somewhat, while supply availability held steady.

Meanwhile, the National Association of Home Builders' housing market index decreased to 36 points in February, down from 37 points in January. Current sales conditions held steady at 41, while sales expectations in the next six months fell three points to 46 and traffic of prospective buyers dropped two points to 22.

Market movers

Warner Bros Discovery gained after announcing that it will enter discussions with Paramount Skydance after receiving a seven‑day waiver from Netflix, allowing it to examine what it described as shortcomings in Paramount's proposal to acquire the whole group. WBD currently has a pending deal with Netflix covering its streaming and studio operations, but Paramount later launched a hostile $30‑a‑share tender offer directly to WBD investors after losing out to Netflix in an earlier bidding process.

General Mills slumped 7% after the food company cut its full-year 2026 sales and profit outlook, citing weak consumer sentiment and a slower, more costly recovery in volumes than previously expected. The company said it now expected 2026 organic net sales to decline 1.5% to 2%, compared with prior guidance of down 1% to up 1%, putting it on course for a third consecutive year of sales declines.

Cruise operator Norwegian surged more than 12% on reports that activist investor Elliott Investment Management is pushing to take a more active role after building its stake to more than 10%, in an effort to help right the ship after a period of underperformance.

Masimo Corp shares soared over 30% after the specialty diagnostics provider agreed to be acquired by science and tech giant Danaher for nearly $10bn. The board of Masimo, which specialises in pulse oximetry and other patient monitoring solutions, has unanimously approved a deal to be taken over for $180 per share in cash, representing a 38% premium to Friday's closing price.