The three major indices of the New York Stock Exchange reversed course on Tuesday, moving into negative territory.
Without any significant market-moving news, investors’ concerns over U.S. President Donald Trump’s tariff policies drove a selloff.
However, the losses were relatively modest, with Nvidia and Tesla continuing their upward momentum among the M7 big tech stocks.
Meanwhile, Boeing found itself caught in the crossfire of the U.S.-China trade dispute.
Markets stumble after three-day rally
The New York stock market’s winning streak came to an end on Tuesday, following a surge on April 11 fueled by hopes that Trump would seek a diplomatic resolution to the tariff dispute with China.
While the Russell 2000, which tracks 2,000 small and mid-cap stocks, closed up by 2.04 points (0.11%) at 1,882.92, the three major indices all finished in the red.
The Dow Jones Industrial Average dropped 155.83 points (0.38%) to end at 40,368.96, while the S&P 500 dipped 9.34 points (0.17%) to 5,396.63.
The tech-heavy Nasdaq slipped 8.32 points (0.05%) to 16,823.17.
Despite the broader market decline, the CBOE Volatility Index (VIX), Wall Street’s fear gauge, continued its downward trajectory, falling 0.77 points (2.49%) to 30.12.
S&P 500 year-end target slashed
Market experts continued to voice pessimism about the stock market’s prospects.
Investment bank Jefferies joined the chorus of bearish forecasts on this day.
Jefferies dramatically cut its year-end target for the S&P 500 from 6,000 to 5,300, implying a further 1.79% decline from current levels.
While more optimistic than JPMorgan’s 5,200 target, Jefferies’ forecast is a stark contrast to the Wall Street average of 6,000.
Should the S&P 500 reach the 6,000 mark by year-end, it would represent an 11% increase from current levels.
Jefferies cited concerns that uncertainty surrounding Trump’s policies could trigger an economic slowdown, potentially limiting earnings per share (EPS) growth for S&P 500 companies to just 5.1% – less than half the market’s average expectation of 11%.
Tesla rises for second straight day despite Death Cross
Tesla shares continued their upward momentum, rising for the second consecutive session. After seeing a 0.02% gain in the previous session, Tesla’s stock climbed $1.76 (0.70%) to close at $254.11.
Tesla’s resilience came despite facing technical challenges.
According to Barron’s, Tesla’s stock chart formed a “death cross” on Monday – a pattern that occurs when a short-term moving average drops below a long-term moving average.
Specifically, Tesla’s 50-day moving average of $289 fell below its 200-day moving average of $291.
While this signals a loss of short-term price momentum, Tesla shares defied the trend.
Nvidia also finished higher, gaining $1.49 (1.35%) to close at $112.20.
In contrast, Apple dipped $0.38 (0.19%) to $202.14, while Microsoft shed $2.08 (0.54%) to end at $385.73.
Alphabet fell $2.79 (1.73%) to $158.68.
Amazon slid $2.53 (1.39%) to $179.59, and Meta Platforms dropped $9.96 (1.87%) to $521.52.
Boeing caught in U.S.-China trade crossfire
Shares of aerospace company Boeing nosedived $3.76 (2.36%) to $155.52.
The sharp decline came as China retaliated against Trump’s tariffs.
Bloomberg reported that Chinese authorities have instructed domestic airlines to stop accepting deliveries of Boeing aircraft, escalating the U.S.-China trade dispute.
This latest blow compounds Boeing’s challenges, as the company was already struggling to regain market share from European rival Airbus following the 737 Max crashes.
With its global supply chain for aircraft parts, Boeing faces significant import tariffs on imported components due to Trump’s tariffs, as well as the risk of losing access to the large Chinese market due to China’s retaliatory measures.
