Stock indexes are mixed in midday trading Tuesday, coming off a broad sell-off following the Trump administration's decision to impose new import tariffs set to go into effect next month on more than a dozen nations.
The S&P 500 was up 0.1% a day after posting its biggest drop since June. The benchmark index remains near its all-time high set last week.
The Dow Jones Industrial Average was down 31 points, or 0.1%, as of 12:32 p.m. Eastern time, and the Nasdaq composite was 0.2% higher.
On Monday, President Donald Trump set a 25% tax on goods imported from Japan and South Korea and new tariff rates on a dozen other nations scheduled to go into effect on Aug. 1.
Trump provided notice by posting letters on Truth Social that were addressed to the leaders of the various countries. The letters warned them to not retaliate by increasing their own import taxes, or else the Trump administration would further increase tariffs.
Just before hefty U.S. tariffs on goods imported from nearly every country around the globe were to take effect in April, Trump postponed the levies for 90 days in hopes that foreign governments would be more willing to strike new trade deals. That 90-day negotiating period was set to expire before Wednesday.
With the tariffs set to kick in now on Aug. 1, the latest move by the White House amounts to essentially a four-week extension of its previous 90-day pause, wrote Tobin Marcus, an analyst at Wolfe Research.
“At a very basic level, nothing actually happened based on Trump sending these letters, so there’s no reason to panic over headlines,” he wrote. “But we think these moves do contain some signal about where the trade war is heading, and that signal is mostly hawkish.”
This latest phase in the trade war heightens the threat of potentially more severe tariffs that’s been hanging over the global economy. Higher taxes on imported goods could hinder economic growth, if not increase recession risks.
Gains among health care and technology stocks helped outweigh a pullback in banks and other sectors.
Intel rose 6.3% and Eli Lilly and Co. was 2.3% higher. JPMorgan was down 3.7% and Bank of America fell 3.1%.
Amazon shares fell 1.1% as the online retail giant kicked off Prime Day, which, beginning this year, lasts four days. Amazon launched the membership sales event in 2015 and expanded it to two days in 2019.
Elsewhere in the market, First Solar fell 4.6% after Trump issued an executive order ending subsidies for foreign-controlled energy companies.
Hershey Co. was down 3.1% after the chocolate maker announced that Wendy’s CEO Kirk Tanner will succeed current CEO Michele Buck, who is retiring.
Shares in WeightWatchers parent WW International rose 1.1% after the company announced that it has completed its reorganization and relisting on Nasdaq. The company filed for Chapter 11 bankruptcy protection in May to eliminate $1.15 billion in debt and focus on its transition into a telehealth services provider.
Bond yields rose. The yield on the 10-year Treasury increased to 4.42% from 4.39% late Monday.
The downbeat start to the week follows a strong run for stocks, which pushed further into record heights last week after a better-than-expected U.S. jobs report.
In stock markets overseas, indexes rose across much of Europe and Asia. In two of the bigger moves, South Korea’s Kospi surged 1.8%, and Hong Kong’s Hang Seng index climbed 1.1%.
U.S. benchmark crude was up 0.9%, while Brent crude, the international standard, was up 0.9%.
The National Federation of Independent Business reported Tuesday that its small business optimism index fell slightly last month, in line with analysts’ expectations. The index tracks how small firms view the U.S. economy and their business prospects.
On Wednesday the Federal Reserve will release minutes from its policymaking committee’s meeting last month. The Fed’s chair, Jerome Powell, has said the central bank wants to wait and see how Trump’s tariffs affect the economy and inflation before making its next move on interest rates.
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