By Stephen Culp
NEW YORK (Reuters) -Wall Street gyrated lower and crude lost ground on Tuesday as investors assessed a spate of mixed earnings and signs that U.S. President Donald Trump’s protracted trade war is hitting corporate profit margins even as Trump’s dealmaking deadline approached, with scant progress to show for ongoing talks between the United States and its trading partners.
The S&P 500 was modestly lower while easing tech shares dragged the Nasdaq to a steeper loss. The blue-chip Dow held on to nominal gains.
Gold extended its gain in opposition to the softening dollar and U.S. Treasury yields eased for the third straight session.
“(Investors are) looking for additional catalysts and you’re seeing some cautious comments coming out of companies,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “They’re hearing mixed guidance when it comes to all this uncertainty revolving around tariffs and the direction things are heading in.”
Second-quarter earnings season has hit full-stride, with nearly one-fifth of the companies in the S&P 500 having reported. Of those, 79% have beaten analyst expectations, according to LSEG data.
Analysts now expect year-on-year S&P 500 earnings growth of 7.0%, on aggregate, a sizable improvement over the 5.8% growth predicted as of July 1, per LSEG.
Still, the effects of trade war have begun seeping into corporate results. General Motors’ GM.N second-quarter core profit slid by 32% as steep tariff costs took a $1.1 billion bite from its bottom line.
Prospects of a U.S.-European Union trade deal appeared to be fading as Washington’s August 1 deadline loomed, prompting EU members to ramp up possible “anti-coercion” retaliatory measures.
U.S. Treasury Secretary Scott Bessent said on Tuesday he would meet with his Chinese counterpart to discuss delaying the trade talks deadline again, as the world’s two largest economies wrestle with the flow of technology and rare earth materials.
“Trump seems to desperately want to make deals if they just come to the table and negotiate,” said Pavlik, adding that U.S. trading partners “seem to resent being forced into a deal so they’re pushing back.”
“And it’s all been sort of artificially been created.” Pavlik added. “The President could have addressed this differently and gotten a much smoother outcome, but he works like a bull in a China shop.”
The Dow Jones Industrial Average rose 38.96 points, or 0.09%, to 44,362.03, the S&P 500 fell 6.29 points, or 0.10%, to 6,299.49 and the Nasdaq Composite fell 89.48 points, or 0.43%, to 20,883.37.
European shares sagged under the weight of disappointing earnings and looming worries over the lack of progress in U.S. trade negotiations.
MSCI’s gauge of stocks across the globe fell 0.80 points, or 0.08%, to 928.84.
The pan-European STOXX 600 index fell 0.47%, while Europe’s broad FTSEurofirst 300 index fell 9.88 points, or 0.47%
Emerging market stocks fell 3.99 points, or 0.32%, to 1,249.49. MSCI’s broadest index of Asia-Pacific shares outside Japan closed lower by 0.24%, to 657.10, while Japan’s Nikkei fell 44.19 points, or 0.11%, to 39,774.92.
The dollar continued to edge lower amid a subdued currency market as investors awaited any sign of progress in trade talks ahead of the August 1 deadline.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.28% to 97.57, with the euro up 0.22% at $1.1722.
Bitcoin resumed its upward climb.
In cryptocurrencies, bitcoin gained 1.82% to $119,134.52. Ethereum declined 1.4% to $3,706.19.
U.S. Treasury yields appeared set to notch a third straight day of declines as the market took a breather on the heels of Monday’s rally.
The yield on benchmark U.S. 10-year notes fell 3.2 basis points to 4.338%, from 4.37% late on Monday.
The 30-year bond yield fell 3.5 basis points to 4.902% from 4.937% late on Monday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.9 basis points to 3.833%, from 3.852% late on Monday.
Oil prices weakened on growing worries over softening demand as the August 1 tariff deadline drew closer.
U.S. crude fell 1.56% to $66.15 a barrel and Brent fell to $68.26 per barrel, down 1.37% on the day.
Gold prices
Spot gold rose 0.9% to $3,425.89 an ounce. U.S. gold futures rose 0.58% to $3,421.70 an ounce.
(Reporting by Stephen Culp; Additional reporting by Tom Wilson in London and Ankur Banerjee in Singapore, editing by Deepa Babington)
