The Dow Jones Industrial Average closed down by 0.37%, while the tech-heavy Nasdaq (+0.03%) and the broad S&P 500 (-0.07%) ended almost unchanged.
“The recent escalation in trade tensions is dampening risk appetite on Wall Street,” summarized José Torres of Interactive Brokers in a statement.
On Monday, Donald Trump vowed to impose tariffs on several countries, including Japan and South Korea, marking a new step in his bid to disrupt international trade.
Fourteen countries have been informed of the tariffs set by Trump, ranging from +25% for Japan, South Korea, and Tunisia to +40% for Laos and Myanmar.
The U.S. President further stated his intention to levy tariffs on imported pharmaceuticals and copper today.
The market remains “waiting to see” and does not want to “overreact,” emphasized Victoria Fernandez of Crossmark Global Investments to AFP.
Investors “better understand Donald Trump’s negotiating style” and will “wait for details before drawing conclusions,” added the analyst.
The deadline for reaching an agreement with trade partners on the tariffs has been officially postponed by the White House resident to August 1, from the previous date of July 9.
The U.S. stock market is also waiting for the release of the minutes from the June meeting of the Federal Open Market Committee (FOMC) on Wednesday.
“The market will be interested in the positions of various members regarding (…) the timing of an interest rate cut,” explained Fernandez.
Financial agents expect the U.S. central bank (Fed) to keep rates unchanged at its next meeting in July, according to CME FedWatch.
However, most anticipate a rate cut at the following meeting in September.
In the bond market, the yield on the 10-year U.S. Treasury note rose to 4.40% around 9:20 p.m. Lisbon time, compared to 4.38% at the previous day’s close.
In the stock market, American aircraft manufacturer Boeing fell 0.05% to $218.52 despite announcing the delivery of 150 commercial aircraft in the second quarter, compared to 92 in the previous year, marking a seven-year high for the period.
Electric vehicle specialist Tesla recovered some ground (+1.32% to $297.81) following the previous day’s decline, driven by the launch of a new political party by Elon Musk, the company’s CEO and a former Trump ally.
Pharmaceutical stocks regained some strength at the end of the session after falling due to Trump’s tariff declarations impacting the sector: Pfizer rose 1.51%, Eli Lilly increased 0.62%, and Novo Nordisk went up 0.46%.
Solar energy stocks tumbled after President Trump signed an executive order to eliminate renewable energy subsidies due to “market distortions.” Sunrun lost 11.43%, First Solar fell 6.54%, and Enphase Energy dropped 3.58%.
