Zacks Equity Research
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Wall Street closed mixed on Tuesday, continuing to sway on tariff concerns. Investor mood was grim on President Trump expanding the global trade war to imported copper, semiconductors and pharmaceuticals. Oil prices hit a 2-week high. One of the three benchmark indexes closed in the red while the other two remained virtually unchanged.
The Dow Jones Industrial Average (DJI) fell 0.4%, or 165.60 points, to close at 44,240.76. Eighteen components of the 30-stock index ended in negative territory, while 12 ended in positive.
The tech-heavy Nasdaq Composite gained 5.95 points, remaining virtually unchanged to close at 20,418.46.
The S&P 500 slid 4.46 points, remaining virtually unchanged to close at 6,225.52. Seven of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Consumer Staples Select Sector SPDR (XLP) and the Financials Select Sector SPDR (XLF) declined 1%, 0.9% and 0.9%, respectively, while the Energy Select Sector SPDR (XLE) added 2.7%.
The fear-gauge CBOE Volatility Index (VIX) decreased 5.5% to 16.81. A total of 17 billion shares were traded on Tuesday, lower than the last 20-session average of 18.3 billion. Advancers outnumbered decliners by a 1.51-to-1 ratio on the NYSE and by a 1.68-to-1 ratio on the Nasdaq.
On Tuesday, President Trump announced sweeping new tariff plans, framing them as part of his ongoing “reciprocal” trade strategy. He announced a hefty 50% tariff on imported copper, calling it a move to bolster U.S. industry. He also confirmed looming tariffs on semiconductors and pharmaceuticals, potentially as high as 200%, as the U.S. broadens its trade offensive.
Simultaneously, Trump reiterated his earlier threat of imposing a 10% surcharge on imports from all BRICS nations, accusing the group of attempting to weaken the U.S. dollar. He emphasized that no extensions would be granted beyond the Aug. 1 deadline for countries to negotiate bilateral trade agreements. Letters have been supposedly dispatched to 14 nations, warning them of tariffs ranging from 25% to 40% from that date unless deals are struck.
In essence, the Trump administration has made clear that copper, pharma and BRICS imports would soon face steep duties, and that all remaining partners had until Aug. 1 to reach an accord or face serious consequences. The markets continued to react unfavorably to these reports, even as the slide was not as steep as on Monday. Stocks from the Dow Index were particularly affected, with utilities, staples and financials facing most of the brunt.
