U.S. stocks closed near the unchanged mark Tuesday after struggling in the early stages of trading, as technology shares rebounded from earlier lows and financial stocks also provided support.

After dropping as much as 1.5% at its lows of the session, the S&P 500 information technology sector erased declines as gains in Nvidia and Apple overcame declines in Microsoft and Oracle .

Worries about artificial intelligence disrupting business models had sparked a selloff in software firms, brokerages and trucking companies the previous week, leading to Wall Street's three main indexes to record their biggest weekly decline since mid-November.

"There's a lot of different trends going on in terms of where investors want to put money right now and you see that in this market where you just see spikes up and spikes down, on maybe not a daily basis, but on a regular basis," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

"The market is looking very short-term here and there will be a return to AI plays being very much in favor." Potential risks from Chinese AI players exacerbated the uncertainty. On Monday, Alibaba unveiled a new AI model, Qwen 3.5, designed to independently execute complex tasks.

Even with the rebound in technology names, software stocks remained under pressure, with the S&P 500 software index down more than 1% with Intuit and Cadence Design the worst-performing in the index on the day.

According to preliminary data, the S&P 500 gained 7.34 points, or 0.11%, to end at 6,843.51 points, while the Nasdaq Composite gained 40.08 points, or 0.14%, to 22,578.38. The Dow Jones Industrial Average rose 42.99 points, or 0.09%, to 49,543.92.

The S&P 500 financials index was among the best-performing of the 11 major S&P sectors on the day. Gains in banks such as Goldman Sachs and JPMorgan Chase helped the Dow recover from a decline of 0.7% earlier in the session.

Consumer staples was the worst-performing S&P 500 sector on the session, dragged lower by a tumble in General Mills after the cereal maker cut its annual core sales and profit forecasts.

This week, the personal consumption expenditure report — the U.S. Federal Reserve's preferred inflation gauge — will be in focus for insights into inflation and how it could impact the central bank's rate-cut trajectory.

The data follows cooler-than-expected consumer inflation data last week that slightly raised bets on interest-rate cuts this year.

Traders are pricing in a chance of roughly 63% for a rate cut of at least 25 basis points at the Fed's June meeting, the first with odds above 50%.

Chicago Fed President Austan Goolsbee said the Fed could approve "several more" interest-rate cuts this year if inflation resumes a decline to the central bank's 2% target, while Governor Michael Barr said that another central bank interest rate cut could come somewhere well down the road amid ongoing risks to the U.S. inflation outlook.

In addition, San Francisco Fed President Mary Daly said the central bank must do a deep dive into the data to determine whether AI is lifting productivity growth and in turn, economic growth, without rekindling inflation that would force tighter monetary policy.

Norwegian Cruise Line shares rallied as the best performer on the S&P 500, after activist investor Elliott said it had built a more than 10% stake in the cruise operator.

Fiserv's shares jumped after the Wall Street Journal reported that activist investor Jana Partners had taken a stake in the payments company.

Masimo shot up after Danaher said it would acquire the pulse-oximeter maker for $9.9 billion, including debt, sending Danaher shares lower.