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Wall Street ends lower as investors consider tariff impact on results, economy

06 August 2025 09:11 (UTC +04:00)

U.S. stocks ended lower on Tuesday as investors weighed the impact of tariffs after Yum Brands (YUM.N), and other companies cited trade duties in their results or outlooks, APA reports citing Reuters.

The U.S. trade deficit narrowed in June on a sharp drop in consumer goods imports, and the trade gap with China shrank to its lowest in more than 21 years.

In addition, a measure of activity in the U.S. services sector hit stall-speed in July, with businesses saying new import taxes are pushing costs higher.

Shares of KFC parent Yum Brands (YUM.N), fell 5.1% after the company missed estimates for the second quarter, as steep trade duties restricted consumer spending.

Caterpillar (CAT.N), warned U.S. tariffs would pose significant challenges in the second half of the year and cost it up to $1.5 billion in 2025, but its shares ended up 0.1%.

The comments come at the tail end of the U.S. second-quarter earnings season, in which about 80% of reports from S&P 500 companies are beating analyst profit expectations.

"If you look at results, they are trending above low-bar expectations," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota.

"The impact of tariffs remains a work in progress. We're not seeing any meaningful impact on company profitability with tariffs. We do know, however, that they loom."

A trader works, as screens broadcast a press conference by U.S. Federal Reserve Chair Jerome Powell following the Fed rate announcement, on the floor of the NYSE in New York

A trader works, as screens broadcast a press conference by U.S. Federal Reserve Chair Jerome Powell following the Fed rate announcement, on the floor of the NYSE in New York, U.S., July 30, 2025. REUTERS/Jeenah Moon/File photo Purchase Licensing Rights, opens new tab

The Dow Jones Industrial Average (.DJI), fell 61.90 points, or 0.14%, to 44,111.74, the S&P 500 (.SPX), lost 30.75 points, or 0.49%, to 6,299.19 and the Nasdaq Composite (.IXIC), lost 137.03 points, or 0.65%, to 20,916.55.

Trump on Tuesday said the U.S. could impose a "small tariff" on pharmaceutical imports before increasing the rate subsequently. He also signaled an announcement on tariffs on semiconductors and chips in the "next week or so."

"Today's market action reflects investors that are merely in pause mode," Sandven said, noting that the backdrop for equities remains constructive for the year.

The S&P 500 and Nasdaq hit a string of record highs recently, and the S&P 500 remains up 7.1% for the year so far.