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Royal Caribbean rises on higher-than-expected profit

forecast

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Lockheed Martin ( LMT ) drops after lower 2025 profit view

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Indexes up: Dow 0.14%, S&P 500 up 0.49%, Nasdaq up 1.24%

(Updates with afternoon prices)

By Shashwat Chauhan and Sukriti Gupta

Jan 28 (Reuters) - Wall Street's main indexes overcame a

choppy start to move higher on Tuesday, as AI-linked shares

rebounded from sharp losses in the last session and helped the

tech-heavy Nasdaq lead gains.

Monday's rout in tech stocks came after Chinese startup

DeepSeek launched artificial intelligence models it said were on

a par or better than industry-leading rivals in the United

States at a fraction of the cost.

AI chip leader Nvidia ( NVDA ) rose 2.6%, a day after $593

billion was wiped off its market value in the biggest

single-session loss for any company. A gauge of semiconductor

shares edged 0.9% lower after losing more than 9% on

Monday.

At 11:56 a.m. ET, the Dow Jones Industrial Average

rose 64.23 points, or 0.14%, to 44,775.51, the S&P 500

gained 29.71 points, or 0.49%, to 6,041.99 and the Nasdaq

Composite gained 240.65 points, or 1.24%, to 19,582.50.

Eight of the 11 S&P 500 sectors were in the red.

Utilities were the biggest decliners with a 2.1% fall,

while technology stocks led gains with a 2.2% rise.

Boosting the Nasdaq, Apple ( AAPL ) jumped 4.2%, while

most megacap stocks also trended higher.

"The selloff was an overreaction, the fact that a Chinese

company poses sincere competition for the whole AI ecosystem

should not be surprising," said Jim Elios, chief investment

officer at Elios Financial Group.

"A correction in some of the AI-related stocks was

inevitable".

The Nasdaq dropped more than 3% on Monday, its worst

single-day showing in more than a month, while the benchmark S&P

500 fell close to 1.5%.

On Tuesday, General Motors ( GM ) posted fourth-quarter 2024

results and a 2025 earnings forecast ahead of expectations. Its

shares, however, slid 10.8% as investors weighed the threat of

tariffs that could hit the automaker's business.

Boeing ( BA ) shares, last up 4.4%, were volatile after the

planemaker reported its biggest annual loss since 2020.

Royal Caribbean gained 12.3% as the cruise operator

forecast annual profit largely above expectations, while

Lockheed Martin ( LMT ) dropped 8.2% after the defense giant

forecast 2025 profit below estimates.

Aerospace and defense major RTX gained 2.1% after

posting a rise in quarterly profit.

Earnings from "Magnificent 7" members Microsoft ( MSFT ),

Facebook-parent Meta, Apple ( AAPL ) and Tesla

are due later this week.

Also in focus, the Federal Reserve is widely expected to

hold its lending rate steady in its first interest-rate decision

of the year on Wednesday, while the December reading of personal

consumption expenditures (PCE) is scheduled for Friday.

U.S. President Donald Trump said late on Monday he plans to

impose tariffs on imported computer chips, pharmaceuticals and

steel.

A media report said newly elected Treasury secretary Scott

Bessent has been pushing for new universal tariffs on U.S.

imports to start at 2.5% and rise gradually by the same amount

each month.

Markets have been on edge about Trump's proposed tariffs due

to concerns they could worsen inflationary pressures and slow

Fed rate cuts.

Declining issues outnumbered advancers by a 1.71-to-1 ratio

on the NYSE and by a 1.72-to-1 ratio on the Nasdaq.

The S&P 500 posted 32 new 52-week highs and 4 new lows while

the Nasdaq Composite recorded 58 new highs and 113 new lows.