Associated Press Business Writer Stanchion
NEW YORK (AP) – US stock indexes are drifting on Tuesday. This is because Wall Street slows down after gathering from deeper holes to the greatest holes of all time earlier this year.
The S&P 500 fell 0.3% in noon trading, but within 3.2% of its record. The Dow Jones industrial average fell 87 points (0.2%) as of 11:25am Eastern time, with Nasdaq’s composites 0.4% lower.
Treasury yields were also drifting down the bond market, but the value of the US dollar was relatively stable against other currencies after Moody’s ratings stated that the US government no longer deserves a top credit rating due to concerns about spiral debt.
Travel industry companies have fallen to some of the worst losses in the US stock market as questions continue to exist about how much US households can spend on vacation. Airbnb fell 2.8%, Norwegian cruise line fell 2.5%, and the Las Vegas Sands lost 2.1%.
On the winning side of Wall Street was D-Wave Quantum, which jumped 30.3% after releasing the latest quantum computing system. The company says it can solve complex problems beyond the scope of classic computers.
Home Depot rose 0.1% after reporting better revenue than expected analysts at the beginning of the year, despite its earnings spanning forecasts. Perhaps more importantly, for Wall Street, home improvement retailers said they are sticking to forecasting profit and sales growth over the year.
It’s against more and more businesses, and has recently said that tariffs and uncertainty around the economy have made it difficult to guess what next year will bring. President Donald Trump has launched strict tariffs on his trading partners, but he has delayed or rewind many of them. Traders hope that Trump will ultimately lower his tariffs after he reaches a trade deal with other countries, but that’s not certain.
Target and Home Depot rival Lowes will report their latest results on Wednesday.
In the bond market, Treasury yields rose late on Monday from 4.46% to 4.48%. The two-year yield, which more closely tracks expectations for action by the Federal Reserve, fell from 3.97% to 3.96% in the second half of Monday.
There remains concern that Trump’s tariffs could push the US economy into a recession, even if it’s OK for the time being. In the event of a recession, the US government may have less room to provide support for the economy through larger spending plans or direct stimulus checks than in previous recessions. That’s because US government debt is now much higher and could be even greater with Washington discussing more taxes.
If the US government is unable to provide much financial support to the economy, it can make the next recession deeper and longer, according to James Egelhoff, chief economist and other strategist at BNP Paribas. It could put more pressure on the Federal Reserve to support the economy itself through lower interest rates.
Other central banks around the world have already begun cutting interest rates.
China’s central bank first cut its loan prime rate in seven months, in a move welcomed by more stimulus-focused investors as the world’s second-largest economy feels in the pinch of Trump’s higher tariffs. Tuesday’s cuts probably won’t be the last of the year, Capital Economics’ Zichun Huang said in a report.
The Reserve Bank of Australia has reduced its benchmark interest rate to 3.85%, the second percentage of this year, finding inflation to be within target range. The previous cuts in February were Australia’s first cut since October 2020.
Following the cuts, stock indexes rose in most parts of the world. Hong Kong’s Hangsen jumped 1.5% on one of the big profits.
China’s CATL, the world’s largest electric battery manufacturer, rose 16.4% in its trading debut in Hong Kong after raising around $4.6 billion at its biggest IPO this year. The stock traded in Shenzhen, a small stock market in post-Shanghai mainland China, and rose 1.2% after soaking early in the day.
AP business writers Matt Ott and Elaine Kurtenbach contributed.
Original issue: May 20, 2025 9:16am EDT
