U.S. stocks moved broadly lower in early trading Tuesday, weighed down by a mixed batch of company earnings and another decline in bond yields.
Banks drove much of the selling as investors reacted to the decline in yields. The 10-year Treasury note slipped to 1.54% from 1.59% late Monday. When bond yields fall, it pulls down the interest rates that banks pocket on mortgages and other consumer loans. Bank of America slid 1.2% and Wells Fargo dropped 1%.
Technology companies, which like banks have tended to lead the market’s gains recently, also took heavy losses. Chipmakers were among the biggest decliners a day after climbing on news that the U.S. gave Chinese telecom giant an extension to buy more supplies from U.S. companies. Advanced Micro Devices fell 2.3% and Nvidia dropped 1.5%.
Home Depot climbed after the home improvement retailer reported earnings that topped Wall Street’s forecasts. But two other big retailers didn’t fare as well. Investors sent Kohl’s and TJX lower after their latest quarterly report cards fell short of analysts’ expectations.
The selling erased some of the indexes’ gains from a three-day winning streak, the latest twist for the market, which has been caught in the grips of volatile trading all month.
Investors are trying to parse conflicting signals on the U.S. economy and determine whether a recession is looming. A key concern is that the escalating and costly trade conflict between the world’s two biggest economies will hamper growth around the globe.
The S&P 500 was down 0.4% as of 10:16 a.m. Eastern Time. The Dow Jones Industrial Average slid 75 points, or 0.3%, to 26,055. The Nasdaq, which is heavily weighted with technology stocks, dropped 0.3%.
Earlier this month, President Donald Trump announced plans to extend tariffs across virtually all Chinese imports, many of them consumer products that were exempt from earlier rounds of tariffs. Although many of the tariffs have been delayed, the founder of Chinese tech giant Huawei said Tuesday he expects no relief from U.S. export curbs due to the political climate in Washington. He expressed confidence the company will thrive because it develops its own technology.
Ren Zhengfei also said he doesn’t want relief from U.S. sanctions if it requires China to make concessions in a tariff war. He noted that the biggest impact will be on American vendors that sell chips and other components to Huawei, the biggest maker of network gear for phone companies.
Huawei has become a big part of the trade war, with the White House showing a willingness to use sanctions against the company as a bargaining chip. The U.S. government blacklisted Huawei in May, deeming it a national security risk, meaning U.S. companies aren’t allowed to sell the company technology without government approval.
“While it is not unexpected, the extension for the easing of Huawei sanctions had added to the relief for markets at the start of the week,” said Jingyi Pan, market strategist for IG in Singapore.