Stocks fall on Wall Street amid earnings, US-China tensions
FILE – Pedestrians walk past the New York Stock Exchange on Friday, July 8, 2022, in New York. Stocks wavered between gains and losses in morning trading on Wall Street Monday, Aug. 1, 2022 as investors face another busy week of corporate earnings reports and economic updates. (AP Photo/John Minchillo, File)
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NEW YORK (AP) — Stocks fell broadly in morning trading on Wall Street Tuesday as investors reviewed the latest corporate earnings for clues on inflation’s ongoing impact.
Wall Street is also closely monitoring rising tensions between the U.S. and China. U.S. House Speaker Nancy Pelosi arrived in Taiwan Tuesday. China has warned of “serious consequences” if the trip to the island that it considers its own territory goes ahead.
The S&P 500 index fell 0.6% as of 10:26 a.m. Eastern. The Dow Jones Industrial Average fell 282 points, or 0.9%, to 32,506 and the Nasdaq fell 0.6%.
Pricey technology stocks and banks were among the biggest weights on the broader market. Microsoft fell 1.8% and JPMorgan Chase fell 1.1%. Utilities gained.
The yield on the 10-year Treasury rose to 2.63% from 2.61% late Monday.
Corporate earnings remain a key focus for investors as they try to assess the health of the economy amid record-high inflation, rising interest rates and recession fears.
Ridesharing company Uber surged 13.8% after reporting surprisingly strong second-quarter revenue. Construction equipment maker Caterpillar fell 2.9% after the economic bellwether reported disappointing second-quarter revenue. Starbucks delivers its results later Tuesday.
Companies within the benchmark S&P 500 have been reporting mostly solid earnings, but many are also warning about weaker customer spending and higher costs because of ongoing supply chain issues. Businesses have raised prices on everything from food to clothing to maintain their profits.
Consumers are also getting squeezed by gas prices. While prices have come down recently, U.S. crude oil prices are still up 25% this year.
Central banks have been trying to rein in 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. That has Wall Street worried that the Fed could go too far and tip the economy into a recession.
Government data last week showed that the U.S. economy contracted in the second quarter, suggesting it could already be in a recession.
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