US retail sales were flat in December, much lower than the expected 0.4% growth. Households cut back on big purchases like vehicles. This slowdown hints at weaker consumer spending and economic growth at the start of 2024. Meanwhile, top tech companies including Amazon, Alphabet, Meta, and Microsoft are planning to spend hundreds of billions in 2026 to lead the artificial intelligence race. This heavy spending worries investors. Traders now bet on a softer Federal Reserve policy, with a 36.9% chance of a rate cut in April, up from 32.2% earlier. Still, most expect interest rates to stay steady until June. That month could bring a new Fed chair if Kevin Warsh is confirmed by the Senate. Mark Luschini, chief investment strategist at Janney Montgomery Scott, called the weak retail sales "bad news is good news" because it can help sectors like utilities and real estate, which benefit from low rates. However, he warned investors to be cautious before the important nonfarm payrolls report on Wednesday. Adding to concerns, White House economic adviser Kevin Hassett said that job growth may slow due to AI-driven higher productivity and slower labor force growth. On Wall Street, the Dow Jones Industrial Average rose slightly by 0.10% to 50,188.14, hitting a new intraday record earlier. But the S&P 500 dropped 0.33% to 6,941.81, and the Nasdaq fell 0.59% to 23,102.47. More stocks gained than fell on the NYSE, while Nasdaq saw slightly more declines. Trading volume was lower than the average of recent sessions, with 17.89 billion shares changing hands. Investors remain watchful as AI investments, retail trends, and Fed moves shape the market outlook.