Stock Prices Suffer due to Trade Barriers and Market Anxiety
In a day marked by economic uncertainty, several major U.S. stock indices have experienced notable declines. The S&P 500 Index, Dow Jones Industrials Index, and Nasdaq 100 Index are all down today, reflecting concerns about global economic growth caused by President Trump's new tariffs.
The tariffs, which have disrupted global supply chains and increased costs, have contributed to slower global economic growth throughout 2025. This disruption is evident in the weaker-than-expected July nonfarm payrolls report, which showed a rise of only 73,000 jobs, and an unemployment rate of 4.2%. The July average hourly earnings, however, rose stronger than expected at +3.9% y/y.
The 10-year T-note yield fell to a 1-month low of 4.224% as a result of these weaker-than-expected economic reports. Stock indexes are at 2-week lows for the S&P 500 and Nasdaq 100, and a 5-week low for the Dow Jones Industrials.
Notable declines include Eastman Chemical (EMN) which is down more than -21% after reporting Q2 adjusted EPS of $1.60. Other companies such as Micron Technology (MU), Microchip Technology (MCHP), Advanced Micro Devices (AMD), GlobalFoundries (GFS), and ARM Holdings Plc (ARM) are down more than -3%.
Meanwhile, Amazon.com (AMZN) is down more than -7% after forecasting Q3 operating income of $15.5 billion-$20.5 billion. Coinbase Global (COIN) is down more than -14% after reporting Q2 total revenue of $1.50 billion. Fluor (FLR) is down more than -32% after reporting Q2 adjusted EPS of 43 cents.
However, not all news was negative. Reddit (RDDT) is up more than +20% after reporting Q2 revenue of $499.6 million. Eli Lilly (LLY) is up more than +2% due to a report about the US government planning to cover weight-loss drugs for federal health programs. Homebuilding stocks are climbing today with DR Horton (DHI), Lennar (LEN), PulteGroup (PHM), and Toll Brothers (TOL) all up more than their respective percentages.
In the corporate earnings front, several companies, including Cboe Global Markets Inc (CBOE), Chevron Corp (CVX), Church & Dwight Co Inc (CHD), Colgate-Palmolive Co (CL), Dominion Energy Inc (D), Exxon Mobil Corp (XOM), Franklin Resources Inc (BEN), Kimberly-Clark Corp (KMB), Linde PLC (LIN), LyondellBasell Industries NV (LYB), Moderna Inc (MRNA), Regeneron Pharmaceuticals Inc (REGN), T Rowe Price Group Inc (TROW), and WW Grainger Inc (GWW), are scheduled for August 1, 2025. WW Grainger (GWW) is down more than -7% after cutting its full-year adjusted EPS forecast to $38.50-$40.25.
Swaps are discounting the chances at 16% for a -25 bp rate cut by the ECB at the September 11 policy meeting. AES Corp (AES) is up more than 3%.
In the tech sector, Broadcom (AVGO), Intel (INTC), and NXP Semiconductors NV (NXPI) are down more than -2%. Monolithic Power Systems (MPWR) is up more than +7%. Marvell Technology (MRVL) is down more than -7%.
The July ISM manufacturing index unexpectedly fell to 48.0, showing manufacturing activity contracted the most in 9 months. The UK Jul S&P manufacturing PMI was revised downward to 48.0 from 48.2.
President Trump's tariffs have caused significant negative implications for global economic growth and stock market performance, specifically impacting the S&P 500, Dow Jones Industrial, and Nasdaq 100 indices. The ongoing volatility is compounded by President Trump's pressure on the Federal Reserve to lower interest rates to mitigate economic impacts, adding further uncertainty to market conditions.
- The tariffs imposed by President Trump have disrupted not only the stock market with index declines, but also various business sectors such as technology, finance, and education-and-self-development, as seen in the financial reports of firms like Eastman Chemical, Coinbase Global, Fluor, and WW Grainger.
- Despite the overall economic uncertainty, there have been positive developments in other areas such as education-and-self-development, with Reddit reporting a revenue increase of over 20%. Additionally, homebuilding stocks and Eli Lilly have also seen growth, indicating that individual sectors within the economy may still be thriving.