By STAN CHOE, Associated Press Business Writer
NEW YORK (AP) — U.S. stocks are slipping on Wednesday after some of the country’s biggest retailers gave mixed forecasts for where they see their profits heading under the uncertainty caused by President Donald Trump’s trade war.
The S&P 500 was down 0.6% in early trading and on track for a second straight drop after breaking a six-day winning streak. The Dow Jones Industrial Average was down 338 points, or 0.8%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.
Stocks were also feeling pressure from rising Treasury yields in the bond market. Such rises in yields can push down prices of all kinds of investments, and yields have been climbing in part because of concerns that big tax cuts under consideration in Washington could pile trillions of more dollars onto the U.S. government’s debt.
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Perhaps more worryingly for Wall Street, Target also cut its forecast for profit over the full year.
Lowe’s, meanwhile, was swinging between modest gains and losses after reporting a profit for the latest quarter that edged past analysts’ expectations. The home-improvement retailer also said it’s sticking with its forecasts for sales and profit over the full year, even with “near-term uncertainty and housing market headwinds,” according to CEO Marvin Ellison.
Its stock was most recently down 0.3%.
A growing number of companies have recently said tariffs and uncertainty about the economy are making it difficult to guess what the upcoming year will bring. Others, including Walmart, have said they’ll have to raise prices to offset the Trump’s tariffs.
U.S. stocks have recently recovered most of their steep losses from earlier in the year as Trump has delayed or rolled back many of his stiff tariffs. Investors are hopeful that Trump will lower his tariffs more permanently after reaching trade deals with other countries.
In the bond market, the yield on the 10-year Treasury rose to 4.53% from 4.48% late Tuesday and from just 4.01% early last month. That’s a significant move in the bond market.
Such yields in effect show how much in interest governments are having to pay investors in order to borrow money, and they’ve been on the rise for developed economies around the world. That’s partly because governments are continuing to borrow more cash to pay their bills, while central banks like the Federal Reserve have cut back on their own investments in government bonds.
Moody’s Ratings became the last of the three major ratings agencies late last week to downgrade the U.S. government’s credit rating on concerns that it may be heading toward an unsustainable amount of debt.
“We do not think that the downgrade matters by itself,” Bank of America strategists wrote in a BofA Global Research report, “but it has served as a wake up call for those investors who had been ignoring the ongoing fiscal discussion.”
In stock markets abroad, indexes were mixed amid mostly modest movements across Europe and Asia
London’s FTSE 100 added 0.1% after a report said inflation in the United Kingdom spiked to its highest level for more than a year in April.
Tokyo’s Nikkei 225 fell 0.6% after a report said Japan’s exports have slowed due to tariffs
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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