Stocks are little changed in early trading on Tuesday as investors pay attention to corporate earnings and the latest tariffs news.
Dow Jones Industrial Average hovered 25 points up while S&P 500 and Nasdaq Composite hugged the flatline at 0.03% and -0.13% respectively. Tech stocks had previously bolstered the latter’s push to a sixth straight winning session on Monday.
The less upbeat Wall Street was likely a reaction to the corporate earnings, with results of General Motors unimpressive. The automaker reported a 32% drop in core profit. The firm announced results before markets opened on Tuesday and showed a $1.1 billion slash on second-quarter profits amid the reported impact of tariffs.
GM’s stock fell as investors reacted to the news that tariffs will likely have a more significant impact in the current quarter. Investors await earnings results from Alphabet and Tesla on Wednesday.
Elsewhere, Bitcoin (BTC) showed resilience as price moved back above $119k following a bout of profit-taking and capital rotation. Oil and gold hovered flat.
Meanwhile, the 10-year U.S. Treasury yield edged to 4.36% while the 2-year Treasury yield hovered at 3.84% and the 30-year yield ticked up one basis point to 4.93%.
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U.S.-China trade agreement
Stocks have reacted resolutely to the tariffs headwinds since an initial dump earlier in the year.
Investors are likely to consider comments by U.S. Treasury Secretary Scott Bessent that the U.S.-China trade agreement struck in mid-May might get an extension as the Aug. 12 deadline approaches. Bessent hinted at this while speaking to Fox Business on Tuesday, noting that he will be meeting his Chinese counterparts in Sweden this coming week.
The two trading partners agreed a 90-day pause to most of the heavy-hitting tariffs in May, buoying stocks. An Aug. 1 deadline for tariffs against other major U.S. trading partners is still in place.
Eyes on Federal Reserve chair Jerome Powell
The outlook across the U.S. Treasury yields is delicately poised ahead of Federal Reserve Chairman Jerome Powell’s speech in the morning, with the Fed chair increasingly under pressure to step down.
U.S. Treasury Secretary Scott Bessent has said Powell does not need to step down, but he has an opportunity to work on his legacy as the central bank comes under scrutiny over issues such as the $2.5 billion.
Trump has also signalled he won’t fire Powell (such an action would likely lead to a legal challenge). Still, investors will be keen on what the central bank chief says about tariffs and the U.S. economy ahead of the Fed’s upcoming meeting on July 29.
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