The session results indicate that the Nasdaq technology index rose by 0.18%, setting a new closing record, while the Dow Jones Industrial Average dropped by 0.98%, and the broad S&P500 fell by 0.40%.
“Stocks pulled back due to new concerns about tariffs,” commented Jose Torres from Interactive Brokers in an analytical note.
Donald Trump announced on Tuesday that he had reached an agreement with Indonesia, allowing this Southeast Asian country to avoid tariffs exceeding the 10% already imposed by the US on its exports to this market.
Previously, Trump announced his intention to complete several trade agreements by August 1, but so far, only three have been announced with the United Kingdom, Vietnam, and Indonesia, while the White House had claimed it was capable of signing up to 40.
Trump’s administration’s shifts in international trade policy have been “very chaotic,” summarized Art Hogan from B. Riley Wealth Management in statements to AFP.
“Investors are unsettled by the trade measures taken by Trump, with more negative than positive news lately,” he added.
Investors analyzed information on the variation of the consumer price index, which showed a year-over-year increase of 2.7% in June, above May’s 2.4%.
While this acceleration aligns with analyst expectations, it marks the second consecutive month of year-over-year increase, contradicting previous trends moving toward the central bank’s two percent target.
“The report is better than we feared, but not enough to dispel concerns about tariffs potentially causing inflation to rise,” detailed analysts from Briefing.com in a written note.
As a result, “expectations for a reduction in [Federal Reserve’s (Fed)] interest rates have decreased significantly,” they added.
Regarding the widespread anticipation of an interest rate cut by the Fed in September, investors now expect the rate to remain unchanged, according to the Fedwatch investor expectations tracker.
Among listed companies, semiconductor conglomerate Nvidia, which closed up 4.04%, supported the Nasdaq after announcing it would resume selling advanced AI-oriented electronic chip models in China.
In early July, Nvidia became the first company with a market capitalization exceeding four trillion dollars. Today’s announcement may further boost its stock, according to analysts.
