Shares of Bank of America and Citigroup rose following their results.
Still, bank executives warned that U.S. consumer spending faces huge risks if the upheaval sparked by President Donald Trump’s trade policy goes on.
Among the biggest weights on the Dow was Boeing. The stock fell 2.4% after Bloomberg reported, citing people familiar with the matter, that China has ordered its airlines not to take further deliveries of Boeing jets in response to the U.S. decision to impose 145% tariffs on Chinese goods.
Federal Register filings on Monday showed the Trump administration was also proceeding with probes into imports of pharmaceuticals and semiconductors, as part of a bid to impose tariffs on the sectors.
Trump’s April 2 announcement of sweeping tariffs sparked turmoil in the market and fueled worries about a global trade war and possible recession. Trading has been more subdued this week, but investors have been unable to focus on much else. “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 shares ended down 0.5% after the company missed estimates for sales of medical devices, despite beating Wall Street estimates for first-quarter revenue and profit.
Barclays on Tuesday downgraded the U.S. auto and mobility sector, saying Trump’s tariffs could pressure automakers’ earnings. Shares of Ford closed down 2.7% while shares of General Motors fell 1.3% and the S&P consumer discretionary index slipped 0.8%.
The Dow Jones Industrial Average fell 155.83 points, or 0.38%, to 40,368.96, the S&P 500 lost 9.34 points, or 0.17%, to 5,396.63 and the Nasdaq Composite lost 8.32 points, or 0.05%, to 16,823.17.
Also in the healthcare space, shares of Merck & Co ended 1% lower.
Bank of America topped estimates for first-quarter profit as interest income grew, and its shares ended up 3.6%.
S&P 500 companies have just begun to report results for the quarter ended March 31, but changes in U.S. trade policy are muddying the outlook and executives could be reluctant to give earnings guidance.
“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.”
Johnson & Johnson’s chief executive said that tariffs on pharmaceuticals can create supply-chain disruptions and that favorable tax policies would be a more effective tool to boost U.S. manufacturing capacity of both drugs and medical devices.
Strategists also are paying close attention to their technical charts after the S&P 500’s 50-day moving average slipped below the 200-DMA on Monday, producing a “death cross” pattern that suggests a short-term correction could turn in to a longer-term downtrend.
The S&P 500 remains down 12.2% from its February 19 record-high close and down about 8% for the year to date.
Advancing issues outnumbered decliners by a 1.29-to-1 ratio on the NYSE. There were 49 new highs and 67 new lows on the NYSE.
On the Nasdaq, 2,399 stocks rose and 2,003 fell as advancing issues outnumbered decliners by a 1.2-to-1 ratio.
The S&P 500 posted 2 new 52-week highs and one new low while the Nasdaq Composite recorded 27 new highs and 95 new lows.
Volume on U.S. exchanges was 15 billion shares, compared with the roughly 19 billion average for the full session over the last 20 trading days.
