U.S. stock-market indexes were under pressure on Monday, as investors watched fresh developments in clashes over tariffs between the U.S. and its global counterparts and digested another batch of corporate quarterly results, which have so far helped drive stocks up over recent sessions.
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What are the main benchmarks doing?The S&P 500 index SPX, +0.06% traded flat at 2,840, with six of its 11 main sectors trading lower. Materials led the declines, down 0.8%. Meanwhile, utilities and financials were in positive territory.
The Nasdaq Composite Index COMP, +0.19% was off up by 14 points, or 0.2%, to 7,825.
The Dow Jones Industrial Average DJIA, -0.19% declined 73 points, or 0.3%, to 25,388.
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What’s driving markets?Trade-war tensions were causing some jitters for investors, as reflected in the Shanghai Composite’s SHCOMP, -1.29% more than 1% drop on Monday. A weekend editorial in China’s Global Times newspaper, known for its nationalistic views, said the country was ready for a “protracted war” over trade and that Washington had “lost its mind” over the skirmish.
On Friday, China announced tariffs on $60 billion of U.S. products, in response to the U.S.’s planned 25% tariffs on $200 billion of Chinese imports. On Sunday, President Donald Trump tweeted that tariffs are “working big time.”
Meanwhile, data showed German manufacturing orders plunged 4% in June, an indication that the global trade dispute is taking a bite out of corporate investments. The German DAX 30 index DAX, -0.30% fell 0.4%.
Oil prices climbed sharply Monday, with West Texas Intermediate futures CLU8, +0.76% up nearly $1, or 1.4%, to $69.47 a barrel, partly boosted by reports late last week that Saudi output may have fallen last month. Also, on Tuesday after midnight, the Trump administration is due to reinstate and intensify Iran sanctions on a range of sectors, with heavier measures aimed at the oil sector due to kick in after 90 days.
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The only U.S. economic item on the agenda is a July survey of consumer expectations, due for release at 11 a.m. Eastern Time.
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What analysts are saying?“Earnings growth has been great in the second quarter, but that has been countered by the signs that tariffs have moved from rhetoric into action and are impacting global supply chain,” said Diane Jaffee, senior portfolio manager at TCW.
Jaffee noted that we might see some downgrades to forecasts over the next few months.
“The uncertainty surrounding midterm elections, which will be finalized in November, might put pressure on the markets, resulting in adjustments of forecasts. At our firm we have incorporated ‘tariff stress tests’ that paint a different picture from the bottoms-up approach,” Jaffee added.
Which stocks are in focus?Shares of SeaWorld Entertainment Inc. SEAS, +15.71% climbed 10% after the theme park and entertainment company posted better-than-expected revenue on a surprise jump in attendance numbers.
Newell Brands Inc. NWL, -9.45% rose 2% after the consumer goods company, which brands include Paper Mate, Elmer’s and Rubbermaid, reported adjusted earnings that beat expectations, while sales fell.
Cardinal Health Inc. CAH, +2.07% will also report ahead of Monday’s open.
Etsy Inc. ETSY, +0.55% Zillow Group Inc. ZG, -0.36% Tenet Healthcare Corp. THC, +1.20% Hertz Global Holdings Inc. HTZ, -1.07% and Weight Watchers International Inc. WTW, +1.42% are among those due to report after the close.
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Shares of Pain Therapeutics Inc. PTIE, -28.22% slid 6.6% after the drug company said the U.S. Food and Drug Administration rejected its non-opioid drug.
PepsiCo Inc.’s longtime leader Indra Nooyi will step aside as chief executive, handing the future of the company PEP, +1.13% to one of her lieutenants at a time when shifting tastes hit the soda and snacks markets.
Tesla Inc. TSLA, +1.46% shares slipped 0.8%. Shares rallied 17% last week, largely due to quarterly earnings that were released Thursday. CEO Elon Musk taunted short sellers, who are sitting on paper losses of nearly $2 billion, over Twitter early Sunday with a video meme of a Adolf Hitler movie.
Read: The revenue-growth rate that helped fuel Tesla’s rally relied on an apples-to-oranges comparison
What are other markets doing?Gold futures GCZ8, -0.52% fell 0.6% to $1,216.60, as the U.S. dollar index DXY, +0.25% jumped 0.3% to 95.449.
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European stocks SXXP, -0.32% traded mixed, while Asian markets finished mixed.
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