Stocks Dip Amid Tariff Anxiety, Target and Lowe’s Miss Earnings

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Stocks Dip Amid Tariff Anxiety, Target and Lowe’s Miss Earnings/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks slipped Wednesday as Target and other major retailers reported mixed earnings. Concerns over President Trump’s trade policies and rising Treasury yields added pressure. Investors remain cautious amid signs of slowing growth and mounting federal debt.

Specialist Joseph Maguire works at his post on the floor of the New York Stock Exchange, Tuesday, May 20, 2025. (AP Photo/Richard Drew)

Retail Earnings + Market Jitters Quick Looks

Index Moves: S&P 500 down 0.4%, Dow -298 pts, Nasdaq -0.2%
Target: Missed expectations, cut guidance, shares fell 5.8%
Lowe’s: Met earnings, cautious outlook, shares dipped 0.5%
Carter’s: Cut dividend citing tariff concerns, stock dropped 12.3%
Keysight Technologies: Beat estimates, raised forecast, stock up 5.7%
Bond Market: 10-year Treasury yield rose to 4.52%
Backdrop: Trump tariffs, tax cuts, and deficit worries mounting
Outlook: Market volatility likely as investors eye economic policy

Deep Look: Wall Street Stumbles After Target, Lowe’s Deliver Caution Amid Trade Uncertainty

NEW YORK — May 21, 2025 — U.S. stock markets trended lower on Wednesday as disappointing earnings and forecasts from key retailers fueled investor anxiety over President Donald Trump’s ongoing trade war and rising government debt levels.

The S&P 500 fell 0.4%, slipping further after Tuesday’s loss that ended a six-day rally. The Dow Jones Industrial Average dropped 298 points, or 0.7%, while the Nasdaq dipped 0.2% in early trading.

Behind the market’s pause: mixed quarterly results and cautious guidance from companies like Target, Lowe’s, and Carter’s, amid broader macroeconomic concerns tied to rising tariffs and government borrowing.

Retailers Reveal Economic Soft Spots

Target Corp. saw its stock tumble 5.8% after missing Wall Street’s revenue and profit expectations. The company blamed reduced consumer spending and fallout from customer boycotts linked to scaling back its diversity and inclusion initiatives. More concerning to analysts, Target also lowered its full-year profit forecast, citing an uncertain retail environment.

Lowe’s, by contrast, managed to slightly beat earnings expectations. But despite that, the home improvement giant offered a cautious outlook and acknowledged ongoing “housing market headwinds.” Shares edged down 0.5%.

Carter’s Inc., the children’s apparel maker, was hammered with a 12.3% drop after cutting its dividend. CEO Doug Palladini cited both long-term investment needs and the growing cost pressure from Trump’s newly proposed tariffs on imported goods.

“We may incur significantly higher product costs,” Palladini warned, reflecting broader concern across the retail sector.

Winners in a Volatile Session

Not every company faced the same turbulence. Keysight Technologies stood out on the positive side, gaining 5.7% after delivering an upbeat earnings report and raising its forecast for the rest of the fiscal year. The company’s hardware and software solutions have benefited from consistent enterprise demand, defying sector-wide headwinds.

Yields Rise, Deficit Fears Mount

In the bond market, the 10-year U.S. Treasury yield rose to 4.52%, up from 4.48% on Tuesday and from 4.01% just weeks ago. Higher yields signal more expensive government borrowing and often drag down equities due to increased competition for investor dollars.

The move comes on the heels of Moody’s Ratings downgrade of the U.S. government’s creditworthiness — making it the third major agency to express concern over Washington’s swelling debt levels.

“It’s a wake-up call for markets,” analysts at Bank of America noted. “Investors can no longer afford to ignore Washington’s fiscal outlook.”

Global Markets: Tepid and Mixed

Overseas, the reaction was muted:

London’s FTSE 100 hovered near flat despite a surprise inflation spike in April.
Tokyo’s Nikkei 225 slipped 0.6% after data showed a slowdown in Japanese exports, largely tied to tariff restrictions.

Economic and Market Outlook

Wall Street’s recent bounce has been fueled by hope that Trump may ease tariffs once trade negotiations progress. But that optimism was tempered Wednesday by the harsh reality facing retailers and manufacturers alike: uncertain input costs, tight consumer wallets, and policy unpredictability.

Meanwhile, the White House continues to push through sweeping tax cuts that critics warn will add trillions to the national debt — a concern now being reflected in bond markets and credit agency reports.

“The market is navigating a complicated maze right now,” said Dana Callahan, equity strategist at LPL Financial. “Mixed earnings, political risk, and fiscal chaos are a volatile mix.”