The S&P 500 and Nasdaq fell and headed for weekly losses as investors weighed fresh corporate earnings, new tariffs, and mounting risks from the Middle East war, according to Reuters. The S&P 500 and the Nasdaq were on track for a second straight weekly loss, while the Dow Jones Industrial Average was set for a third consecutive week of declines.
Markets Fall Amid Earnings and Geopolitical Pressures
Losses in heavyweight information technology capped market advances, even as the real estate sector rose 2.3% to lead gains on the benchmark index. Daniela Hathorn, senior market analyst at Capital.com, noted that markets are becoming increasingly selective as artificial intelligence remains the dominant investment theme, showing less tolerance for elevated spending without a clear path to returns. Recent reports from Alphabet and Tesla deepened concerns over AI spending by highlighting rising capital expenditures and cash burn. Meanwhile, Intel fell 3.8% despite forecasting quarterly profit and revenue above Wall Street estimates.
Tariffs and Middle East Conflicts Drive Energy and Inflation Concerns
Geopolitical risks intensified after U.S. missiles struck targets across Iran following President Donald Trump’s warning of major military punishment for Tehran and its Houthi allies in Yemen. These developments threatened to disrupt global energy supplies, sending oil prices surging above $100 a barrel before easing somewhat. Brent crude fell 3.5% to $97.19.
Concurrently, the Trump administration imposed new tariffs of 10% and 12.5% on goods from 60 trading partners, citing lax enforcement of forced-labor bans. As reported by AP News, the move came as a temporary 10% global tariff expired, adding fresh pressure on companies importing goods that typically pass costs along to consumers. Higher energy costs also threaten household budgets, with gasoline costing $4.10 per gallon nationally, according to AAA.
Federal Reserve Meeting and Economic Data Ahead
As central banks monitor potential inflation concerns from sustained energy shocks, the Federal Reserve is due to meet to decide on monetary policy. Markets were pricing in a roughly one-in-three chance of a rate hike, up from 12% a week earlier, according to CME’s FedWatch tool. Investors are also preparing to watch next week’s Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, which is scheduled for release a day after the policy decision.
Economic data showed that activity in the U.S. services sector accelerated in July, aided in part by spending around the FIFA World Cup and the Independence Day holiday. In contrast, the pace of growth in the manufacturing sector eased to its slowest rate since March.
Stock Market Performance Snapshot
Individual corporate updates also moved markets, with Verizon adding 2.8% after raising its annual forecast for adjusted profit and free cash flow, as detailed by USA Today. Conversely, American Express fell 6% despite reporting a quarterly profit jump, and Micron Technology and Broadcom dropped 6% and 2.3%, respectively.
At 09:57 a.m., market indexes stood as follows:
- Dow Jones Industrial Average: Rose 93.49 points (0.18%) to 51,805.14
- S&P 500: Lost 6.65 points (0.09%) to 7,401.65
- Nasdaq Composite: Lost 155.55 points (0.62%) to 24,982.14
