Stocks closed lower Tuesday, snapping a two-day rally as investor jitters returned to the fore.
The S&P 500 slipped 0.22%, the Dow fell 0.36%, and the Nasdaq edged down 0.05%. Despite recent gains, all three major indices remain well below their pre-April 2 levels, when President Trump’s “Liberation Day” tariff announcements first rattled markets.
Auto stocks fell despite fresh rumors of a possible reprieve on tariffs. Ford, GM, and Rivian each ended the day lower, following a new forecast from S&P Global Ratings (SPGI) projecting a 700,000-unit drop in annual U.S. car sales if tariffs move ahead. “Affordability challenges and elevated interest rates are already pressuring demand,” analysts wrote. “Tariffs would only exacerbate those headwinds.”
Tech and financial names led the upside among individual stocks. Palantir surged more than 6% following news that NATO finalized its purchase of the company’s AI-powered Maven Smart System. Hewlett Packard Enterprise jumped 5% amid ongoing activist investor pressure, and Netflix (NFLX) added nearly 5%. Bank of America and Citigroup also posted solid gains after beating first-quarter earnings expectations, fueled by strong trading revenue and consumer banking results.
Investors are now looking ahead to fresh earnings from United Airlines (UAL) and The Trade Desk (TTD), both due after the bell, and to a Wednesday slate that includes Abbott Labs (ABT) and U.S. Bancorp (USB)—reports that should offer further insight into consumer health and the state of regional lending.
Morning and midday movers
Stocks opened higher Tuesday, with tech and bank names leading the charge as investors welcomed a morning packed with strong earnings and fresh deal buzz. Big banks were in rally mode: Citigroup, Bank of America, and Goldman Sachs all ticked higher after posting better-than-expected results, fueled by strong trading revenues.
Palantir Technologies jumped 4% after NATO finalized its purchase of the company’s AI-powered Maven Smart System — another boost for the defense-tech darling after Monday’s rally. Apple also edged higher, extending its 2% gain from Monday, which followed a surprise tariff exemption from the Trump administration.
Meanwhile, Hewlett Packard Enterprise (HPE) caught a wave of investor enthusiasm after activist firm Elliott Investment Management revealed a $1.5 billion stake and backed the company’s newly announced strategic review. The broader market got a lift as chipmakers, software stocks, and AI plays rode the wave, with early signs pointing to a tech-led session and plenty of earnings drama still to come.
Auto stocks gave back some of Monday’s gains, with Rivian (RIVN), Ford, and GM trading lower despite President Trump floating a potential delay in auto tariffs. “A US car with all US parts made in the US is a fictional tale,” analysts at Wedbush wrote, warning that the proposed tariffs — if not paused — could send the industry into “upside down mode” and trigger widespread supply-chain disruption.
Premarket futures pointed down
U.S. stock futures edged down Tuesday morning, with the S&P 500, Nasdaq, and Dow Jones Industrial Average trading just below the break-even line as investors braced for a flurry of corporate earnings.
Goldman Sachs (GS) kicked off the week’s earnings slate with a profit jump, even as CEO David Solomon warned of a “markedly different” environment in the current quarter. Echoing Solomon’s sentiments, in March, hedge funds unloaded global stocks at the fastest pace in over a decade — a sign that institutional investors may be growing more cautious as economic uncertainty deepens.
Tuesday’s earnings lineup includes Bank of America (BAC), Citigroup (C), Johnson & Johnson (JNJ), and Rent the Runway (RENT) before the bell, offering a pulse check across finance, healthcare, and consumer spending.
Bank of America beats on earnings like other banks
Bank of America beat expectations in the first quarter, with EPS of $0.90 on $27.37 billion in revenue, lifted by a strong showing in its trading division. Like Goldman Sachs, the bank benefited from market volatility, which juiced results even as the broader economic outlook remains uncertain.
Looking to Bank of America’s consumer banking division, revenue rose 3% to $10.5 billion, with combined credit and debit card spend hitting $228 billion — up 4% from a year ago. The bank added about 250,000 new consumer checking accounts, marking its 25th straight quarter of growth, and saw 4 billion digital logins, with 65% of sales now digitally enabled.
Still, CEO Brian Moynihan struck a cautious tone, noting that “we potentially face a changing economy in the future.”
Citi rides card growth and trading gains to a Q1 beat
Citigroup posted first-quarter 2025 net income of $4.1 billion, or $1.96 per share, on $21.6 billion in revenue — a 3% increase from a year ago. Growth was broad-based across all five core businesses, with standout performances in the markets and wealth divisions.
U.S. personal banking revenue rose 2% to $5.2 billion, powered by gains in branded cards and retail banking, though partially offset by a drop in retail services. Net interest income climbed 6%, fueled by loan growth in branded cards and wider deposit spreads in its retail banking.
Cancer drugs lift results as J&J redraws its legal playbook
Johnson & Johnson beat Wall Street expectations in the first quarter, reporting adjusted earnings per share of $2.77 on revenue of $21.89 billion. Sales of cancer drug Darzalex jumped 20% year over year to $3.24 billion, helping drive 4.2% growth in the company’s “innovative medicine” segment.
The healthcare giant raised its full-year revenue guidance to between $91.6 billion and $92.4 billion, reflecting the impact of its Intra-Cellular Therapies acquisition and the addition of Caplyta, a treatment for bipolar depression. However, adjusted EPS guidance held steady at $10.50 to $10.70 as the company factors in tariffs, deal-related costs, and currency headwinds.
J&J also moved to reverse $7 billion previously set aside for talc-related legal settlements, after courts rejected its bankruptcy-based strategy for resolving lawsuits over its discontinued baby powder. The company maintains the claims are without merit and says it will defend them in state courts.
Yellen says Trump’s economic policies are shaking faith in the dollar
During a television appearance on Monday, former Treasury Secretary Janet Yellen warned that Trump’s economic strategy is eroding global trust in U.S. financial assets, with volatility in Treasury yields reflecting broad investor unease.
Treasury yields continued to climb on Tuesday, with the 10-year yield reaching 4.43%, as investors reacted to ongoing trade tensions and concerns over inflation. The bond market’s volatility has raised questions about the long-term stability of U.S. financial assets.
Both the Dow and the S&P 500 added about 0.8% on Monday, while the Nasdaq climbed about 0.6%. All three indexes briefly slipped into the red before rebounding, buoyed by tech stocks after the Trump administration issued a surprise tariff exemption. Apple (AAPL) stock gained more than 2% on Monday, while Palantir Technologies (PLTR) surged almost 5% following news that NATO had finalized its Maven Smart System purchase.
Auto stocks also rallied Monday after President Donald Trump suggested his administration may offer tariff relief for automakers moving parts production. General Motors (GM) and Ford (F) each rose more than 3%, though no specifics were provided.
