Wall Street Slides Again Amid Trump Tariff Fallout/ Newslooks/ WASHINTON/ J. Mansour/ Morning Edition/ U.S. stocks fell sharply Tuesday as Trump’s trade war spurred profit warnings from major companies and AI stocks continued to cool.
Trump Tariffs Rattle Wall Street – Quick Looks
- Market Slump: S&P 500 down 1.1%, Nasdaq falls 1.4%, Dow sinks 438 points
- AI Stocks Cool: Palantir drops 13.5%, Nvidia slips 2.4% amid fading AI hype
- Tariff Fallout: Clorox, Ford, and Mattel cut forecasts citing tariff uncertainty
- Corporate Anxiety: More companies suspend guidance due to economic unpredictability
- Fed in Focus: Central bank meeting underway; rates expected to stay unchanged
- Global Markets Mixed: Gains in China, losses elsewhere as investors react
Wall Street Slides Again Amid Trump Tariff Fallout
Deep Look
NEW YORK — Wall Street fell sharply for a second straight day Tuesday as growing fears over President Donald Trump’s escalating trade war collided with a cooldown in artificial intelligence stocks, hammering corporate outlooks and investor confidence alike.
The S&P 500 sank 1.1%, while the Dow Jones Industrial Average dropped 438 points (also 1.1%). The Nasdaq Composite was the hardest hit, falling 1.4% as high-flying tech and AI stocks extended their retreat.
AI Fades as Tariff Turmoil Takes Center Stage
The Wall Street buzz surrounding artificial intelligence lost more steam, with Palantir Technologies plunging 13.5%, despite posting solid earnings and raising its full-year revenue forecast. Investors appear to be skeptical of lofty valuations, as Palantir’s stock still sits near $110, up from just $20 last year.
Nvidia, the poster child of the AI boom, also slid 2.4%, adding to concerns that AI momentum may have peaked, at least temporarily.
But AI wasn’t the only concern.
Corporate America Rings the Alarm
A growing number of major U.S. companies are now reporting concrete damage from Trump’s tariffs, and many are scrapping their 2025 forecasts altogether as they struggle to assess the economic impact.
- Clorox CEO Linda Rendle cited changing consumer habits and slowing demand linked to rising costs, leading to a 5.3% stock drop after the company missed both revenue and profit targets.
- Ford Motor Co. expects a $1.5 billion operational hit in 2025 due to tariffs and withdrew its full-year financial guidance, echoing warnings from General Motors last week.
- Mattel also paused its guidance, citing the “evolving U.S. tariff landscape” and its impact on American consumer behavior — particularly ahead of the crucial holiday season.
Economy at a Crossroads
This latest wave of corporate unease comes just as the Federal Reserve begins its two-day policy meeting, with a decision on interest rates expected Wednesday. While no rate change is anticipated, markets remain highly sensitive to any signals about future cuts or hikes.
Trump has continued to press for rate cuts to counterbalance tariff-driven inflation, but the Fed remains cautious, wary that premature action could worsen inflationary pressures.
The U.S. economy contracted 0.3% in Q1, raising recession concerns even before the full effects of the tariff standoff materialize.
DoorDash Slides Despite Solid Orders
DoorDash tumbled 8.5% despite stable U.S. order growth, after missing revenue expectations for the quarter. The company also announced a $3.9 billion acquisition of UK-based Deliveroo, signaling plans to expand in Europe, Asia, and the Middle East — a bold bet at a time of economic uncertainty.
DoorDash’s mixed results were seen by some analysts as a snapshot of resilient consumer demand, but not strong enough to outweigh broader macroeconomic concerns.
Global Markets and Bond Watch
- Shanghai Composite rose 1.1%
- Hang Seng (Hong Kong) gained 0.7%
- Germany’s DAX, France’s CAC 40, and UK’s FTSE 100 saw modest losses
In the bond market, the 10-year U.S. Treasury yield ticked slightly lower to 4.35%, a sign that investors are seeking safer assets amid rising volatility.
Outlook: Uncertainty Reigns
With the Fed meeting, tariff uncertainty, and mixed corporate earnings all hitting at once, the market mood has shifted. The optimism that fueled a nine-day winning streak — the longest since 2004 — has quickly given way to a more cautious, defensive posture.
Without clarity on trade policy or relief from inflation, Wall Street may remain under pressure in the weeks ahead.
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