U.S. stock indexes showed mixed results on Tuesday as trade tensions between the United States and China continued. The S&P 500 ended the day down 0.2% after fluctuating between losses and gains. The Dow Jones Industrial Average rose by 0.4%, while the Nasdaq composite dropped 0.8%. These moves followed a period of sharp market swings in recent days.
On Friday, Wall Street experienced its worst day since April, followed by its best day since May on Monday. The volatility was driven by changing trade sentiment between the U.S. and China.
The most recent market shift came after China’s Commerce Ministry banned Chinese companies from dealing with five subsidiaries of South Korean shipbuilder Hanwha Ocean. This action was seen as a response to President Donald Trump’s efforts to revive the U.S. shipbuilding industry. European markets were mixed, and Asian markets declined.
The S&P 500 closed at 6,644.31, down by 10.41 points. The Dow Jones Industrial Average rose by 202.88 points to 46,270.46, while the Nasdaq fell by 172.91 points to 22,521.70.
Technology stocks were among the hardest hit due to their exposure to China for manufacturing and sales growth. Nvidia’s stock fell by 2.6%, and Broadcom declined by 3.5%.
The ongoing trade conflict between the U.S. and China remains a significant concern for investors because both countries have large economies that influence global markets. Disputes over international shipping and shipbuilding have increased tensions, with both countries imposing new port fees on each other’s vessels starting Tuesday.
“We remain cautiously optimistic that both sides will ultimately pursue a negotiated resolution, given the significant economic stakes,” said Ulrike Hoffmann-Burchardi, chief investment officer for the Americas and global head of equities at UBS Global Wealth Management.
So far, the U.S. economy has not experienced major effects from changing tariff policies, but that could change if retaliatory tariffs increase costs for consumers.
A government shutdown in the U.S. has stopped regular updates on key economic indicators like inflation and employment, making it harder for investors and economists to assess the impact of tariffs. Investors are now focusing on company earnings reports for insights into the broader economy.
Banking sector earnings suggest Wall Street may be heading toward one of its most profitable quarters ever. However, bank executives expressed caution about market conditions and the overall economy. JPMorgan Chase shares fell by 1.9%, Wells Fargo rose by 7.1%, and Citigroup increased by 3.9%. Other notable gainers included Caterpillar (up 4.5%) and Walmart (up 5%).
Beyond Meat saw its stock fall by 24.6%, dropping below $1 per share amid concerns over its plan to reduce debt through issuing more shares.
With limited economic data available due to the shutdown, the Federal Reserve is also operating with less information than usual when making policy decisions. In September, the central bank cut its benchmark interest rate by a quarter percentage point due to concerns about unemployment—the first cut of the year—with further cuts expected later in October and December.
Fed Chair Jerome Powell commented on Tuesday: “Rising downside risks to employment have shifted our assessment of the balance of risks,” during a meeting of the National Association of Business Economics in Philadelphia.
Treasury yields remained steady; the yield on the 10-year Treasury slipped slightly to 4.03%. Bond markets were closed Monday due to a holiday.
Gold prices rose by 0.7%, staying above $4,100 per ounce—a level supported by uncertainty around tariffs and the economy.
