US Stock Market: DJIA, S&P500 and Nasdaq turns red in early trade on Tuesday
- Nasdaq Composite fell 64.13 points or 0.52% to 12,304.84
- Technology stocks were the biggest weights on the broader marker
- The yield on the 10-year Treasury increased to 2.63%
Stocks fell significantly in early trading on Wall Street Tuesday as investors reviewed the latest corporate earnings for clues on inflation’s ongoing impact. Investors are also closely watching rising tensions between the US and China. The US House Speaker Nancy Pelosi is possibly visiting Taiwan, and China has warned of "serious consequences" if the trip to the island that it considers its territory goes ahead.
The S&P 500 index fell 28.35 points or 0.69% as of 10:14 am Eastern time. The Dow Jones Industrial Average fell299.24 points or 0.91% to 32,499.16. The Nasdaq Composite fell 64.13 points or 0.52% to 12,304.84.
Technology and bank stocks were among the biggest weights on the broader marker. Microsoft slipped 1.8% and JPMorgan Chase fell 1.1%
Also Read | A brief history of the China-Taiwan conflict
The yield on the 10-year Treasury increased to 2.63% from 2.61% late Monday.
Shares of ridesharing company Uber climbed 13.8% after it reported stronger-than-expected revenue. Construction equipment manufacturer Caterpillar fell 2.9% after the economic bellwether reported disappointing second-quarter revenue. Starbucks will announce its results later Tuesday.
Companies under the benchmark S&P 500 have been reporting mostly strong earnings, but many are warning about weaker customer spending and higher costs because of current supply chain issues. Businesses have increased prices on everything from food to clothing to remain profitable.
Moreover, gas prices are putting a strain on consumers. While prices have reduced recently, US crude oil prices are still up 25% this year.
Central banks have been trying to control inflation by raising interest rates to slow economic growth. The Federal Reserve’s key short-term interest rate is at its highest level since 2018. Investors are concerned that the Fed could go too far and lead the economy into a recession.
According to government data released last week, the US economy contracted in the second quarter, suggesting it could already be in a recession.