STORY: Wall Street's main indexes ended lower on Tuesday, with the Dow falling marginally, the S&P 500 shedding half a percent and the Nasdaq losing almost two-thirds of a percent.
President Donald Trump said tariffs on pharmaceutical imports could eventually go as high as 250%, and signaled duties on semiconductors and chips could be announced in the “next week or so.”
Meanwhile, second-quarter earnings results from a slew of companies reflected the weight of tariffs already settled, said Brian Mulberry, client portfolio manager at Zacks Investment Management.
“We're starting to see stress form in some of those less healthy balance sheets. Their earnings are starting to slow and in fact even turn negative to a certain extent. In fact, a couple of weeks ago, we saw Kohl's turn into a meme stock because, again, their earnings structures are just starting to weaken over time. And then you turn back to the Mag [Magnificent] 7 where it just still seems like they've got such a tight grip on the value of this market. They represent a large portion of it. They still make up roughly 30% of the market cap of the S&P. And they're still driving 70 to 75% of the earnings growth in the S&P 500. So we're still in this moment, where the Mag 7 goes, the market tends to follow.”
Shares of Yum Brands lost more than 5% after the company missed estimates for the second quarter, as steep trade duties restricted consumer spending.
Among other movers, shares of Snap tumbled roughly 15% in extended trading after the social media company reported its slowest quarterly revenue growth in more than a year, a sign of increased competition from larger rivals including Meta.
And shares of Advanced Micro Devices, down nearly 1.5% at the close, dropped further in extended trading despite forecasting third-quarter revenue above Wall Street estimates.
Shares of the AI chipmaker have climbed more than 40% this year, far outpacing a nearly 12% jump in the benchmark chip index.
