United States

US stocks dip amid trade tensions despite strong bank earnings

Image Credits: UnsplashImage Credits: Unsplash
  • Trade tensions weigh on markets as tariff uncertainty hits Boeing, autos, and healthcare stocks, with China retaliating against U.S. tariffs by halting Boeing jet deliveries.
  • Bank earnings provide limited relief, with Bank of America and Citigroup posting strong results, but executives warn of risks to consumer spending if trade disputes persist.
  • Investors remain cautious amid fears of a prolonged downturn, as the S&P 500 forms a "death cross" and companies hesitate to provide earnings guidance due to trade policy volatility.

[UNITED STATES] US stocks closed slightly down on Tuesday as trade uncertainty persisted and shares of consumer and healthcare sectors fell, while strong bank results provided some support. Bank of America and Citigroup's shares soared following their results. Nonetheless, bank executives warned that the instability caused by President Donald Trump's trade policy poses significant dangers to US consumer spending.

Market analysts note that the ongoing trade tensions have particularly rattled sectors reliant on global supply chains, including technology and industrials. The White House's aggressive stance on tariffs has left many companies scrambling to reassess their sourcing strategies, with some considering price hikes to offset higher import costs. This could further squeeze consumer wallets at a time when inflation concerns are already simmering.

Boeing was among the Dow's biggest weights. The stock dipped 2.4% after Bloomberg reported, citing people familiar with the subject, that China had ordered its airlines not to accept new Boeing jet deliveries in response to the US decision to levy 145% tariffs on Chinese imports.

The aviation sector’s woes highlight the broader risks of retaliatory measures in a trade dispute. Boeing, a key exporter to China, now faces potential order cancellations or delays, which could ripple through its supply chain and hurt smaller aerospace suppliers. The company’s troubles also underscore how geopolitical tensions can swiftly translate into financial pain for multinational corporations.

According to Federal Register papers on Monday, the Trump administration is also investigating pharmaceutical and semiconductor imports in order to slap tariffs on those sectors.

The market was thrown into upheaval after Trump announced hefty tariffs on April 2, fueling fears of a global trade war and a possible recession. Trading has been more quiet this week, but investors have been unable to concentrate on anything else.

Meanwhile, the International Monetary Fund (IMF) trimmed its global growth forecast for 2024, citing trade tensions as a key downside risk. The IMF’s warning adds to a chorus of concerns from economists who argue that prolonged tariff battles could dampen business investment and slow economic momentum worldwide. This sentiment has kept many investors on edge, even as corporate earnings show resilience.

"Earnings have been pretty good, but this is a market that's just beset by tariff and trade uncertainty, and those are really the only catalysts that matter at this point," said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky. "On a day where you're bereft of those (catalysts), it's kind of a wayward market, and we're seeing that today."

Johnson & Johnson's stock fell 0.5% after the company missed medical device sales targets despite exceeding Wall Street expectations for first-quarter revenue and profit. Barclays downgraded the US auto and transportation sectors on Tuesday, citing concerns that Trump's tariffs will have a negative impact on automaker earnings. Ford stock closed down 2.7%, General Motors down 1.3%, and the S&P consumer discretionary index fell 0.8%.

Auto industry insiders warn that tariffs on steel and aluminum, combined with potential levies on imported vehicles, could raise production costs significantly. This comes at a delicate time for the sector, which is already grappling with slowing demand and the costly transition to electric vehicles. Some analysts fear that higher prices could further dent consumer interest in big-ticket purchases.

The Dow Jones Industrial Average slid 155.83 points, or 0.38%, to 40,368.96; the S&P 500 sank 9.34 points, or 0.17%, to 5,396.63; and the Nasdaq Composite fell 8.32 points, or 0.05%, to 16,823.17. Merck & Co shares fell 1% in the healthcare sector as well. Bank of America's first-quarter profit above expectations as interest income increased, and its shares rose 3.6%.

S&P 500 firms have only begun to report results for the quarter ending March 31, but changes in US trade policy are clouding the future, and executives may be hesitant to provide earnings predictions.

"As far as the results from Q1, those basically occurred in a world that doesn't really exist anymore," Mayfield said. "It's going to be about guidance, and I expect a lot of companies to just kind of punt and rescind their guidance."

JThe CEO of Johnson & Johnson stated that tariffs on pharmaceuticals can cause supply-chain disruptions and that favorable tax policies would be a more effective instrument for increasing US manufacturing capacity for both drugs and medical equipment. Strategists are also paying particular attention to their technical charts after the S&P 500's 50-day moving average fell below the 200-day moving average on Monday, forming a "death cross" pattern that signals a short-term correction may morph into a longer-term downturn.

The S&P 500 is still down 12.2% from its record-high finish on February 19, and is down around 8% year to date. On the NYSE, advancing issues outweighed decliners 1.29-to-1. The NYSE recorded 49 new highs and 67 new lows.

On the Nasdaq, 2,399 stocks gained and 2,003 fell, with advance issues outnumbering decliners by a 1.2-to-1 ratio. The S&P 500 set two new 52-week highs and one new low, while the Nasdaq Composite set 27 new highs and 95 new lows. Volume on US exchanges was 15 billion shares, compared to the nearly 19 billion average for the entire session over the prior 20 trading days.s.




Finance World
Image Credits: Unsplash
FinanceJuly 18, 2025 at 11:00:00 AM

Hong Kong’s follow-on fundraising surge poised to continue, say top bankers

While global IPO markets remain tentative, Hong Kong has quietly engineered a pivot: the action isn’t at the IPO bell—it’s what comes after....

Finance Malaysia
Image Credits: Open Privilege
FinanceJuly 18, 2025 at 9:00:00 AM

Ringgit upside potential hinges on structural conviction

The ringgit isn’t rallying on fundamentals. And that’s the point. For all the talk of undervaluation and eventual mean reversion, Malaysia’s currency sits...

Finance United States
Image Credits: Unsplash
FinanceJuly 17, 2025 at 12:00:00 PM

Fed expected to maintain interest rates as inflation remains above 2% target

The Federal Reserve’s July 2025 decision to hold interest rates steady was expected by most market participants—but its implications stretch far beyond short-term...

Finance World
Image Credits: Unsplash
FinanceJuly 16, 2025 at 11:30:00 AM

Asian currency moves reflect Fed rate cut doubts

Asian currencies may be consolidating—but this quiet is deceptive. With the US Federal Reserve signaling fewer rate cuts than markets anticipated, Asia’s room...

Finance World
Image Credits: Unsplash
FinanceJuly 15, 2025 at 10:00:00 AM

Hong Kong financial services rebound reveals strategic adaptation

While the broader Hong Kong economy remains sluggish, one sector is outperforming all expectations: financial services. This rebound is not a surprise to...

Finance United States
Image Credits: Unsplash
FinanceJuly 15, 2025 at 9:30:00 AM

Wall Street earnings outlook signals a cautious capital rebalancing

US equities closed with modest gains as investors awaited upcoming corporate earnings and key economic data. But this isn’t a case of “market...

Finance Malaysia
Image Credits: Open Privilege
FinanceJuly 14, 2025 at 10:00:00 AM

Ringgit strengthens as US tariff plans stir global repricing

The ringgit’s early-week strengthening against the US dollar may look modest at first glance—but its underlying message is far from benign. The US...

Finance World
Image Credits: Unsplash
FinanceJuly 11, 2025 at 9:30:00 AM

Asian currencies slip despite broader risk-on mood

The contrast couldn’t be sharper. Global equities are climbing on risk-on sentiment. Yet across Asia, currencies from the Korean won to the Malaysian...

Finance United States
Image Credits: Unsplash
FinanceJuly 10, 2025 at 10:30:00 AM

What Fed division on interest rate cuts signals for capital strategy

The Federal Reserve’s internal divide over the timing and rationale for rate cuts is no longer a footnote—it’s a strategic signal in its...

Finance World
Image Credits: Unsplash
FinanceJuly 10, 2025 at 10:30:00 AM

China deflation and tariff policy standoff rattles Hong Kong markets

At first glance, Hong Kong’s markets appear calm. The Hang Seng Index dipped less than 0.1% by mid-morning Thursday, and the tech-heavy subindex...

Finance World
Image Credits: Unsplash
FinanceJuly 9, 2025 at 11:00:00 AM

Asian currencies steady amid renewed U.S. tariff risk

The mild but consistent consolidation of key Asian currencies—ranging from the Thai baht to the South Korean won—is beginning to reflect more than...

Finance Malaysia
Image Credits: Unsplash
FinanceJuly 9, 2025 at 10:00:00 AM

Bursa market activity slows in anticipation of OPR decision

Trading across Bursa Malaysia was notably subdued this week, with volumes thinning and sectors drifting into quiet stasis. On paper, the lull appears...

Load More