Feb 24 (Reuters) - Wall Street's main indexes were mixed in choppy trading on Monday, as investors awaited results from chip giant Nvidia for clues on the future of demand for artificial intelligence technology.
Most megacap stocks fell, with Tesla (TSLA.O), Meta (META.O), and Microsoft (MSFT.O), down between 1% and 2%.
Microsoft has scrapped leases for sizeable data center capacity in the U.S., suggesting a potential oversupply of AI infrastructure, TD Cowen analysts said in a note published late on Friday.
The news came weeks after the launch of low-cost AI models from China's DeepSeek in January rattled tech stocks and stoked doubts about whether U.S. companies were spending too much on the technology and overestimating demand going ahead.
"It seems like this is a sector that I think has gone too far, too fast and yet everything you hear is a lot of these companies are still coming out saying that they are still spending," said Joe Saluzzi, co-founder of Equity Trading at Themis Trading.
Nvidia's quarterly results, expected on Wednesday, puts the chip sector in the spotlight for the week.
"(Nvidia) is a stock that has moved so much so quickly. So (it) better have really good earnings and people will be looking at guidance and spending going forward," Saluzzi said.
Shares of Nvidia were flat on Monday while most other chip stocks declined. The broader Philadelphia SE Semiconductor Index (.SOX), was down 0.6%.
At 11:56 a.m. ET, the Dow Jones Industrial Average (.DJI), rose 137.74 points, or 0.32%, to 43,565.76, the S&P 500 (.SPX), gained 3.72 points, or 0.08%, to 6,017.71 and the Nasdaq Composite (.IXIC), lost 84.31 points, or 0.43%, to 19,439.69.
Chart represents the percentage by which Nvidia has exceeded or not met analysts' expectations for quarterly revenue. Nvidia has outdone estimates for nine consecutive quarters.
Chart represents the percentage by which Nvidia has exceeded or not met analysts' expectations for quarterly revenue. Nvidia has outdone estimates for nine consecutive quarters.
Apple (AAPL.O), reversed premarket declines to gain 0.9%. The iPhone maker unveiled plans to spend $500 billion in U.S. investments in the next four years, including setting up a giant factory in Texas for AI servers.
German business leaders are urging the new government to move quickly to boost the weak economy.
Seven of the 11 S&P 500 sectors edged up and healthcare (.SPXHC), led declines with a 1% rise. Value stocks (.IVX), rose 0.5% to outperform their growth peers (.IGX), that dipped 0.3%.
Last week, U.S. stock indexes registered losses after a batch of weak economic data and a disappointing forecast from Walmart (WMT.N), sparked concerns that the world's largest economy was stalling. The benchmark S&P 500 and a smallcaps index (.RUT), marked their worst daily declines of 2025 on Friday.
On the data front, the Personal Consumption Expenditure index - the Federal Reserve's preferred inflation gauge - is expected on Friday and could help markets gauge the timing of the central bank's first rate cut this year.
Interest rate futures indicate the Fed will leave borrowing costs unchanged for the first half of the year, according to data compiled by LSEG.
Among others, Berkshire's Class B shares rose 4% to touch a record high after the Warren Buffett-owned conglomerate reported a record annual profit.
Nike (NKE.N), added 4.7% after Jefferies raised its rating to "buy" from "hold".
Domino's Pizza (DPZ.O), fell 2.7% after missing expectations for fourth-quarter same-store sales.
Markets are also on edge for any tariff comments from U.S. President Donald Trump.
Advancing issues outnumbered decliners by a 1.13-to-1 ratio on the NYSE and declining issues outnumbered advancers by a 1.46-to-1 ratio on the Nasdaq.
The S&P 500 posted 25 new 52-week highs and 6 new lows while the Nasdaq Composite recorded 31 new highs and 184 new lows.
Reporting by Johann M Cherian, Sukriti Gupta and in Bengaluru; Editing by Devika Syamnath
