Dow Jones Industrial Average Dips As AI Disruption Fears Persist, FOMC Minutes Loom

The Dow Jones Industrial Average (DJIA) fell around 120 points, or 0.24%, on Tuesday as investors returned from the Presidents' Day holiday and picked up right where they left off: selling tech. The S&P 500 shed roughly 0.5% while the Nasdaq Composite led losses, dropping around 0.8% as software and semiconductor names bore the brunt of ongoing AI disruption anxiety. The session continued a pattern that has dogged markets for weeks: the Dow and S&P 500 have now fallen in four of the past five weeks, and the Nasdaq notched its fifth straight weekly decline heading into this week. A drop in the 10-year Treasury yield to fresh two-month lows near 4.03%, following last Friday's cooler-than-expected Consumer Price Index (CPI) print, offered limited support to rate-sensitive sectors.

AI disruption trade rolls on

The software-as-a-service (SaaS) selloff showed no sign of letting up. Salesforce (CRM) dropped around 2.5%, while Intuit (INTU), Oracle (ORCL), and ServiceNow (NOW) all traded lower as fears that AI automation tools could erode demand for traditional enterprise software continued to ripple through the sector. CrowdStrike (CRWD) fell more than 2% after Mizuho cut its recommendation. On the hardware side, Nvidia (NVDA) slipped, as did AMD (AMD) and Broadcom (AVGO), with investors questioning whether massive datacenter capital expenditures will translate into the returns that have been priced in. Chevron (CVX) led Dow decliners, falling 2.6%, while Caterpillar (CAT) shed 2.1%. On the flip side, Travelers Companies (TRV) rose 1.8%, Visa (V) gained 1.5%, and Apple (AAPL) added 1% as financials found support from lower Treasury yields.

Danaher (DHR) strikes $9.9 billion deal for Masimo (MASI)

Danaher (DHR) plunged around 6% after announcing a definitive agreement to acquire medical device maker Masimo (MASI) for $180 per share in an all-cash deal valued at approximately $9.9 billion. The deal represents a 38% premium to Masimo's Friday close, and Masimo shares surged roughly 34% on the news. It marks Danaher's biggest acquisition since its $5.7 billion purchase of Abcam in 2023, as the life sciences giant looks to expand into patient monitoring. The transaction is expected to close in the second half of 2026. Medtronic (MDT) (MDT) slipped 2.5% despite beating quarterly expectations, as investors were underwhelmed by forward guidance that included the expected impact of tariffs.

Warner Bros (WBD) reopens Paramount (PSKY) deal talks

Warner Bros Discovery rose more than 2% after announcing it would reopen takeover negotiations with Paramount Skydance, which gained around 3%. Netflix (NFLX), Warner Bros' preferred bidder, granted a seven-day waiver allowing the discussions, which are set to run through February 23. Paramount has signaled willingness to raise its all-cash offer to at least $31 per share, up from the previously rejected $30 bid. Netflix's existing agreement to acquire Warner's studio and streaming businesses for roughly $83 billion in enterprise value remains the board's recommended deal, but the reopened window adds a fresh layer of intrigue to one of the biggest M&A battles in entertainment history.

Looking ahead: FOMC Minutes, PCE, and Palo Alto (PANW) earnings

The economic calendar this week is back-loaded with market-moving events. Today's NY Empire State Manufacturing Index came in at 7.1, just above the consensus estimate of 6 and down marginally from 7.7 in January, showing that New York State manufacturing activity continued to expand modestly. The Federal Open Market Committee (FOMC) Minutes from the January meeting drop on Wednesday and should offer color on why policymakers held rates steady at 3.50-3.75%. Markets are still pricing in roughly two 25-basis-point rate cuts by year-end, with the first cut most likely arriving in June. Friday's Personal Consumption Expenditures Price Index (PCE) report and preliminary fourth-quarter Gross Domestic Product (GDP) data will be the week's main events. After the bell on Tuesday, Palo Alto Networks reports fiscal second-quarter results, with consensus looking for revenue of $2.58 billion and adjusted earnings per share (EPS) of $0.94. The cybersecurity firm has beaten revenue estimates in every quarter over the past two years.

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