The S&P 500 slipped on Tuesday after touching a fresh intraday record, as investors navigated a heavy wave of corporate earnings and lingering uncertainty over U.S.-China trade negotiations.
At the closing bell (4:00 p.m. ET), the Dow Jones Industrial Average dropped 204 points, or 0.5%, while the S&P 500 eased 0.3% after hitting an all-time intraday high of 6,409.26. The Nasdaq Composite fell 0.4%.
U.S. stocks have been trending higher in recent sessions following news over the weekend of a trade agreement between the United States and the European Union.
Trade Tensions Remain in Focus
Investors kept a close watch on ongoing trade talks between Washington and Beijing. U.S. Trade Representative Jamieson Greer said Tuesday that negotiations with China were “moving in the right direction” but provided no details on whether the two sides are closer to a deal or whether the current truce on tariffs will be extended.
If no extension is agreed upon, tariffs on Chinese goods could revert to the harsher levels last imposed on April 2. Earlier this year, both countries reached preliminary agreements that helped cool an escalating trade conflict characterized by tit-for-tat tariffs and disruptions in rare earth mineral exports.
Fed Meeting Underway
The Federal Reserve kicked off its latest two-day policy meeting, with a decision due Wednesday. Rates are widely expected to remain unchanged at 4.25%–4.5%, but markets will be looking for signals on whether a rate cut is possible later in the year.
Fed Chair Jerome Powell has maintained a cautious “wait-and-see” approach as policymakers assess the economic fallout from the Trump administration’s aggressive trade stance. However, recent comments from some Federal Open Market Committee (FOMC) members suggest a growing push for lower rates.
President Donald Trump again pressured the central bank on Monday, calling for rate cuts to help accelerate U.S. economic growth.
The Bank of Japan is also set to announce its latest policy decision on Thursday, with no changes expected. That same day, investors will parse June’s PCE price index—the Fed’s preferred inflation gauge—for clues on how tariffs are affecting consumer prices.
The week also brings a flurry of labor-market data, including JOLTS Job Openings later Tuesday, ADP private payrolls on Wednesday, jobless claims Thursday, and the closely watched July jobs report on Friday.
Earnings Flood the Market
The busiest stretch of earnings season is underway, with over 150 S&P 500 companies set to report results this week. Tech heavyweights—part of the so-called “Magnificent Seven”—are in focus, with Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) reporting Wednesday, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday.
Among notable movers Tuesday:
- Merck (NYSE:MRK) fell after announcing job and cost cuts aimed at saving $3 billion annually. The pharma giant’s Q2 earnings were hit by weak demand for its Gardasil vaccine in China.
- Novo Nordisk (NYSE:NVO) slumped after cutting its full-year sales and profit forecast for the second time in 2025, citing weaker-than-expected demand for its weight-loss drug Wegovy.
- PayPal (NASDAQ:PYPL) declined after projecting flat quarterly profit compared with a year earlier, despite raising its full-year outlook.
- United Parcel Service (NYSE:UPS) plunged 10.6% as volatile trade conditions dented Q2 revenue and profit.
- UnitedHealth (NYSE:UNH) slipped after reinstating its full-year profit forecast, which still fell short of already-lowered analyst expectations.
- Whirlpool (NYSE:WHR) tumbled following disappointing second-quarter results and a steep cut to its 2025 guidance.
Visa (NYSE:V) will report after markets close, capping a jam-packed day of earnings.
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