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 8, 2025 at 11:30:00 AM

Is Hong Kong’s loan shark crackdown missing the real threat—debt collectors?

Hong Kong’s loan shark problem isn’t just about sky-high interest rates or desperate borrowers. It’s about the invisible layer that makes the entire...

Finance World
Image Credits: Unsplash
FinanceJuly 8, 2025 at 11:30:00 AM

Asian currency gains reflect trade agreement optimism

As headlines tout renewed efforts toward US–Asia trade reconciliation, Asian currencies have begun to strengthen—subtly, but meaningfully. The timing is not coincidental. It...

Finance Malaysia
Image Credits: Unsplash
FinanceJuly 7, 2025 at 12:30:00 PM

FBM KLCI dips as market consolidates ahead of tariff deadline and OPR decision

The cautious tone that gripped investors at Monday’s open reflects more than mere technical retracement. As the FBM KLCI slipped 5.45 points to...

Finance Malaysia
Image Credits: Open Privilege
FinanceJuly 7, 2025 at 11:00:00 AM

Ringgit strengthens against US dollar ahead of Bank Negara policy meeting

While the ringgit gained slightly against the US dollar this week, hovering near RM4.2060, seasoned strategists aren’t reading this as a vote of...

Finance United States
Image Credits: Unsplash
FinanceJuly 5, 2025 at 1:00:00 PM

How the US could undermine its own currency—and why it matters globally

I’m a journalist. I’m trained to remain detached, especially when writing about politics. But the past few months have tested that commitment—because when...

Finance World
Image Credits: Unsplash
FinanceJuly 4, 2025 at 8:30:00 AM

China pressed to rebuild local fiscal capacity through 30 trillion yuan debt swap plan

A proposal by Tsinghua University’s Academic Centre for Chinese Economic Practice and Thinking to issue 30 trillion yuan (US$4.2 trillion) in central treasury...

Finance United States
Image Credits: Unsplash
FinanceJuly 4, 2025 at 8:00:00 AM

S&P 500 and Nasdaq notch record closes after upbeat jobs report

Markets ended the week at record highs, powered by Nvidia’s climb toward a $4 trillion valuation and a stronger-than-expected US jobs report. But...

Finance World
Image Credits: Unsplash
FinanceJuly 3, 2025 at 10:30:00 AM

US trade pacts raise barriers to China’s offshore exports, pressuring Hong Kong stock

The Hang Seng Index dropped 1.2% on Thursday morning, erasing Wednesday’s gains, as investors responded to new trade agreements between the United States...

Finance World
Image Credits: Unsplash
FinanceJuly 2, 2025 at 1:00:00 PM

Beijing growth policy lures mainland fund flows back to Hong Kong

Hong Kong’s stock market rebounded from a one-week low on Wednesday, lifted by a wave of mainland capital flowing into selected sectors. At...

Finance World
Image Credits: Unsplash
FinanceJuly 2, 2025 at 10:30:00 AM

KPMG sees growth potential for Hong Kong banks through AI and shifting trade flows

While Hong Kong’s banks posted stable profits in 2024, the sector enters 2025 without obvious growth levers. Interest margins have plateaued. Loan demand...

Finance United States
Image Credits: Unsplash
FinanceJuly 1, 2025 at 10:00:00 AM

Senate moves to extend Trump’s tax cuts

On paper, the Senate’s push to extend Trump’s tax cuts feels like a 2017 flashback. The corporate rate stays at 21%. Small business...

Tax United States
Image Credits: Unsplash
TaxJune 27, 2025 at 5:30:00 PM

Republican megabill sharpens fiscal penalties for immigrant families

The Republican-backed immigration and tax legislation now moving through Congress is more than a budgetary maneuver. While framed as part of a broader...

Load More