U.S. stocks declined again on Tuesday as trade tensions linked to President Donald Trump’s tariff policies continued to cloud the economic outlook, prompting more companies to pull back financial forecasts. Investor enthusiasm for artificial intelligence-related stocks also appeared to weaken, contributing to the overall market downturn. The S&P 500 slipped 0.5% in afternoon trading, following its first loss after a nine-day rally. The Dow Jones Industrial Average fell 198 points, or 0.5%, and the Nasdaq Composite was down 0.6%. The declines reflected growing investor concern over the impact of tariffs on corporate earnings and consumer behavior.
AI-focused companies were among the biggest drags on the market. Palantir Technologies dropped 14% despite meeting quarterly earnings expectations and raising its full-year revenue outlook. Its sharp decline highlighted broader investor caution toward tech stocks that had previously seen rapid gains. Nvidia, another key player in the AI sector, slipped 0.7%. More companies cited tariff-related disruptions as a reason for suspending financial guidance. Ford Motor said it expects a $1.5 billion financial impact from tariffs this year and withdrew its forecast for the remainder of 2025.
Clorox reported lower-than-expected quarterly revenue and profit, attributing the results to shifting consumer habits amid economic uncertainty. CEO Linda Rendle noted noticeable changes in shopping behavior during the first quarter. Toymaker Mattel also paused its 2025 financial forecast, citing unpredictability in the U.S. tariff landscape. While the company reported stronger-than-anticipated earnings for the quarter, executives said they could not reliably assess how tariffs might affect consumer spending later this year, particularly during the holiday season.
Meal delivery company DoorDash fell 7.5% after reporting weaker revenue than expected and announcing a deal to acquire British firm Deliveroo for $3.86 billion. Despite the revenue miss, the company said order growth in its U.S. market remained stable over the past year. The bond market reflected some of the broader caution, with the yield on the 10-year U.S. Treasury note falling slightly to 4.35%. Investors are also awaiting the outcome of the Federal Reserve’s two-day policy meeting, which began Tuesday.
While no changes to interest rates are expected, attention is focused on whether the Fed signals any likelihood of rate cuts later in the year. Global markets showed mixed results, with stock indexes in Shanghai and Hong Kong posting modest gains. In contrast, Wall Street’s focus remained fixed on domestic trade developments and economic indicators, with continued volatility likely until clearer policy direction emerges. – By MENA Newswire News Desk.