Wall Street in Contemplation: Caution Prevails Amid Tariff Uncertainty
U.S. stocks ended slightly lower Tuesday as uncertainty over trade tariffs continued to weigh on investor sentiment. Consumer and healthcare stocks were particularly hard hit, while strong earnings from leading banks softened the overall picture.
Banks Surprised, But Warned
Bank of America and Citigroup shares rose after reporting quarterly results that beat analysts' expectations. However, despite the encouraging figures, bank executives expressed serious concerns: US consumer spending could be at risk if trade tensions triggered by President Donald Trump's policies continue to escalate.
China Responds: Boeing Takes a Hit
One of the main factors that pulled the Dow down was Boeing shares, which lost 2.4% of their value. The reason was a Bloomberg report that Chinese authorities instructed national airlines to suspend new deliveries from Boeing. This decision was a direct response to Washington's actions, which imposed tariffs of 145% on certain categories of Chinese exports.
J&J Unimpressed: Medical Equipment Let Down
Pharmaceutical giant Johnson & Johnson shares fell by half a percent. Investors were disappointed with the performance of the medical device division, whose sales fell short of market expectations. This is despite the fact that the company's overall revenue and profit for the first quarter were higher than Wall Street analysts had forecast.
Auto industry on the sidelines: analysts downgrade forecasts
Investment bank Barclays on Tuesday cooled enthusiasm for the American auto industry, lowering its rating on the sector. Experts believe that new tariff initiatives of the Trump administration could negatively affect the profitability of automakers. Investors reacted quickly: Ford shares fell by 2.7%, and General Motors shares fell by 1.3%. The S&P consumer staples index lost 0.8%, which underscores the overall market caution.
Moderate losses: indices are in the negative
American stock indices ended the day in the "red zone". The Dow Jones fell 155.83 points, or minus 0.38%, to close at 40,368.96. The broader market, as reflected by the S&P 500, fell 9.34 points, or -0.17%, to close at 5,396.63. The tech-heavy Nasdaq Composite lost 8.32 points, or 0.05%, to close at 16,823.17.
Pharma under pressure: Merck loses ground
The healthcare sector was not left out of the sell-off. Shares of pharmaceutical company Merck ended the day down 1% despite the lack of negative corporate news. It seems that investors are increasingly pricing in market-wide risks associated with the White House's trade measures.
Bank of America Pleases Investors
Amidst the general turbulence, Bank of America's report was a positive exception. One of the largest US banks beat expectations for its first-quarter profit, helped by growth in net interest income. The market reaction was appropriate — the bank's shares added 3.6%, making it one of the leaders of the day.
S&P 500 Can't Regain Its Heights: The Fall Continues
The US S&P 500 stock index is still unable to return to its previous peaks — it has lost 12.2% since its record close on February 19. Since the beginning of the year, the index has fallen by about 8%, reflecting widespread volatility and growing concerns about global economic stability.
American Chips Under Control: The Tech Sector Under Pressure
The US administration has tightened export controls on microchips that are critical for the development of artificial intelligence. The restrictions apply to supplies to China of products from technology giants Nvidia, AMD and H20. The new rules also affected the flagship MI308 model. After the close of trading, Nvidia reported that the measures introduced could cost the company $5.5 billion, which immediately affected the value of its shares - the papers fell by 6%.
Trump Pushes Hard: Minerals Are the Next Front
President Donald Trump is not slowing down in his tough trade strategy, once again expanding the scope of economic pressure. This time, he has ordered an investigation that could lead to new tariffs on all imports of strategic minerals for which the United States relies heavily on China.
Light at the End of the Tunnel? China's GDP Surprises with Growth
Despite the escalating standoff, China's economy has shown resilience. The country's GDP grew 5.4% in the first quarter, beating analysts' forecasts. However, market participants note that these figures reflect the situation before the 145% U.S. tariffs go into effect — and a slowdown is likely to come.
Asia Slips: Tech Stocks at the Epicenter
MSCI's regional index, which tracks Asia-Pacific stocks outside Japan, snapped its four-day winning streak and fell 1.3%. The Hong Kong Stock Exchange saw a particularly strong decline, with the Hang Seng Index falling by 2.3%. The main reason was the sell-off in the technology sector, which came under pressure due to new export restrictions.
Wall Street under pressure again: Nasdaq in the red
The American market continues to experience stress: Nasdaq futures showed a drop of 1.3%, reflecting investor pessimism regarding further steps in the US-China trade confrontation. Unrest in the technology sector and global risks are once again taking precedence over hopes for stabilization.
Europe is preparing for a slump
Nervousness has also spread to European exchanges. Pre-trade indicators of the EUROSTOXX 50 are signaling a probable decline of 0.7% at the opening of trading. It seems that the old continent will not remain unaffected by the consequences of global geoeconomic tensions.
Gold is in demand: investors are fleeing to safe havens
Amid growing uncertainty, gold has once again become the main beneficiary. The price of the precious metal jumped by 1.3%, setting a new historical maximum of $3,275 per ounce. The market is clearly pricing in a scenario of prolonged volatility and is looking for reliable safe haven assets.
British inflation: room for maneuver
Today, traders' attention will be riveted to the publication of inflation data from the UK. Forecasts suggest a decrease in the main index to 2.7% compared to the previous 2.8%. Core inflation is also expected to slow slightly - from 3.5% to 3.4%. Such figures could open the way for the Bank of England to further easing of monetary policy - markets estimate the probability of a rate cut in May at about 80%.
Canada in anticipation: the rate is in question
The upcoming meeting of the Bank of Canada also adds intrigue. Investors are less confident, with the likelihood of a rate cut estimated at just 40%. The reason is political uncertainty: the country will hold a general election at the end of the month, which limits the regulator's readiness to take decisive action in the short term.
Powell takes the stage: markets hold their breath
Later in the day, Federal Reserve Chairman Jerome Powell will give a speech, and market participants are waiting for him to provide clarity on the future course of monetary policy. The main question is whether he will repeat the unexpectedly "soft" message voiced earlier by one of the key Fed members, Christopher Waller.
If Powell does confirm this sentiment, it could signal a more decisive bet on interest rate cuts — that is, a return to easing policy in the near term.
