Indexes end lower as investors consider tariff impact on company results
In addition, U.S. President Donald Trump said the U.S. could impose a "small tariff" on pharmaceutical imports before increasing the rate subsequently. He also signaled an announcement on tariffs on semiconductors and chips in the "next week or so."
Shares of KFC parent Yum Brands (YUM.N), opens new tab fell after the company missed estimates for the second quarter, as steep trade duties restricted consumer spending.
Caterpillar (CAT.N), opens new tab warned of an up to $1.5 billion hit in 2025.
The results come at the tail end of the U.S. reporting period for the second quarter.
"If you look at results, they are trending above low-bar expectations," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota.
"The impact of tariffs remains a work in progress. We're not seeing any meaningful impact on company profitability with tariffs. We do know, however, that they loom."
According to preliminary data, the S&P 500 (.SPX), opens new tab lost 30.75 points, or 0.49%, to end at 6,299.19 points, while the Nasdaq Composite (.IXIC), opens new tab lost 136.92 points, or 0.65%, to 20,916.66. The Dow Jones Industrial Average (.DJI), opens new tab fell 61.56 points, or 0.14%, to 44,112.08.
Earlier in the day, data showed ISM's nonmanufacturing purchasing managers index (PMI) slipped to 50.1 last month from 50.8 in June, as little changes in orders and weaker hiring, alongside rising input costs.
"Today's market action reflects investors that are merely in pause mode," Sandven said.
While the backdrop for equities remains constructive for the year, "clearly near-term there are some headwinds," he said, including elevated valuations given recent record highs in the S&P 500.
In other company news, Marriott International (MAR.O), opens new tab cut its annual forecast on slowing travel demand.
Stocks sold off on Friday after a disappointing July jobs data and sharp downward revisions to prior months, but indexes bounced back on Monday.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
10 minutes ago
- Reuters
OpenAI eyes $500 billion valuation in potential employee share sale, source says
Aug 5 (Reuters) - ChatGPT maker OpenAI is in early talks for a potential secondary stock sale that would allow current and former employees to sell shares, valuing the company at around $500 billion, a source familiar with the matter told Reuters on Tuesday. Bloomberg was first to report the news. The Microsoft (MSFT.O), opens new tab-backed company aims to raise billions through the sale, with existing investors, including Thrive Capital, expressing interest in buying some of the employee shares, the source said. Thrive Capital declined to comment on a Reuters request. Separately, OpenAI is still in the process of raising $40 billion in a new funding round led by SoftBank Group (9984.T), opens new tab at a $300 billion valuation to advance AI research, expand computational infrastructure and enhance its tools.
Reuters
10 minutes ago
- Reuters
Nvidia reiterates its chips have no backdoors, urges US against location verification
BEIJING, Aug 6 (Reuters) - Nvidia (NVDA.O), opens new tab has published a blog post reiterating that its chips did not have backdoors or kill switches and appealed to U.S. policymakers to forgo such ideas saying it would be a "gift" to hackers and hostile actors. The blog post, which was published on Tuesday in both English and Chinese, comes a week after the Chinese government summoned the U.S. artificial intelligence (AI) chip giant to a meeting saying it was concerned by a U.S. proposal for advanced chips sold abroad to be equipped with tracking and positioning functions. The White House and both houses of U.S. Congress of requiring U.S. chip firms to include location verification technology with their chips to prevent them from being diverted to countries where U.S. export laws ban sales. The separate bills and White House recommendation have not become a formal rule, and no technical requirements have been established. "Embedding backdoors and kill switches into chips would be a gift to hackers and hostile actors. It would undermine global digital infrastructure and fracture trust in U.S. technology," Nvidia said. It had said last week its products have no backdoors that would allow remote access or control. A backdoor refers to a hidden method of bypassing normal authentication or security controls. Nvidia emphasized that "there is no such thing as a 'good' secret backdoor - only dangerous vulnerabilities that need to be eliminated."
Daily Mail
39 minutes ago
- Daily Mail
Major Democrat is under criminal investigation after Trump called him a 'scam artist'
A Democrat enemy of Donald Trump is under criminal investigation for mortgage fraud after the president called him a 'scam artist' who belonged in prison. California Senator Adam Schiff is accused of misrepresenting which home he used as his primary residence. A Trump administration insider told Fox News host Laura Ingraham that the US Attorney's Office in Maryland is considering pressing charges. The Department of Justice last month received a criminal referral from the Federal Housing Finance Agency (FHFA) allegeding Schiff falsified bank documents and property records to secure better loan terms. In a 2011 affidavit signed by Schiff, he declared a home in Montgomery County, Maryland, as his primary residence, but as recent as 2023, a condominium in Burbank, California, is also listed as his primary residence. Schiff and his wife purchased a Maryland home in 2003 for $870,000 with a $610,000 mortgage. The rate was set at 5.625 percent over 30 years, on the basis that it was their primary and principal residence. 'Based on media reports, Mr. Adam B. Schiff has, in multiple instances, falsified bank documents and property records to acquire more favorable loan terms, impacting payments from 2003-2019 for a Potomac, Maryland-based property,' FHFA Director William Pulte wrote. 'As regulator of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, we take very seriously allegations of mortgage fraud or other criminal activity. 'Such misconduct jeopardizes the safety and soundness of FHFA's regulated entities and the security and stability of the U.S. mortgage market.' Last month, Trump hit out at Schiff in a Truth Social post in the latest escalation in their long-running feud. 'Adam 'Shifty' Schiff is in BIG TROUBLE,' Trump wrote. 'He falsified loan documents.' Trump also went on to slam Schiff for orchestrating an 'American Tragedy' by investigating his son Donald Trump Jr.'s phone records in 2019 amid concerns about the origin of a meeting with Russians held in Trump Tower three years prior. 'He once said my son would go to prison on a SCAM that Schiff, along with other Crooked Dems, illegally 'manufactured' in order to stage an actual coup,' Trump wrote. 'My son did nothing wrong, knew nothing about the fictional story. It was an American Tragedy! 'Now Shifty should pay the price of prison for a real crime, not one made up by the corrupt accusers!' Schiff had threatened to subpoena Don Jr. to glean new details about two phone calls he made to blocked numbers after meeting with a Russian lawyer. At the time, Trump was under investigation for potentially colluding with the Kremlin. He also led the charge to impeach Trump in his role as chair of the House Intelligence Committee. Barbara McQuade, a former U.S. attorney for the Eastern District of Michigan told the publication it was 'awfully coincidental' that Trump's critics have been subjected to home loan investigations. 'You don't get a free pass because you're a public official,' McQuade said. 'But I think they've really undermined the credibility of the department by staking out this ground seeking retribution against Trump's enemies.' Trump said he wanted to see Schiff 'brought to justice' through the investigation into his finances. But Schiff maintained his innocence and argued he was being persecuted by the Trump administration as political retribution for his involvement in opposing the family over the years. 'This is just Donald Trump's latest attempt at political retaliation against his perceived enemies,' Schiff wrote on X. 'So it is not a surprise, only how weak this false allegation turns out to be.' A spokesperson for his office insisted the lenders for both of his homes - one in Washington and another in California - were aware that he intended to use both year-round while serving in public office. He maintained neither home is considered a 'vacation' property. Appointing one home as a primary residence can allow a borrower to secure lower rates, because it is considered a less risky investment. Schiff took aim at the president during an appearance on Stephen Colbert's show telling him to 'p**s off '. 'But before you p**s off, would you release the Epstein files?' Schiff asked, to rapturous applause. It is unclear how Trump became aware of Schiff's mortgages, or what involvement he has played in the investigation so far. According to The Washington Post, a confidential memo within Fannie Mae, the lender responsible for the questionable loans, said an investigation has been ongoing amid concerns Schiff 'engaged in a sustained pattern of possible occupancy misrepresentation on 5 Fannie Mae loans'. The internal memo states the company's financial crimes team received a document demand from the Federal Housing Finance Agency on May 12 relating to loan files. It states that a condo in Burbank, California, has at times been listed as a 'primary residence' before adding, 'however the 691 square foot, 1-bedroom unit appears unsuitable for a family of four, raising doubts about their true occupancy intent.' Each of the loans involved have since been paid off in full.
