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US stocks pulled back on Wednesday as investors weighed a flare-up in US-China tensions over chips and assessed Target (TGT)-highlighted retail earnings for insight into the economic impact of President Trump's tariffs.
The Dow Jones Industrial Average (^DJI) fell about 0.8% or more than 350 points. The S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) also dropped about 0.7% each.
Stocks are continuing a retreat on Tuesday when the S&P 500 snapped a six-day run of gains as relief over the surprise US-China trade truce faded. Meanwhile, growing concern about the US deficit and ballooning debt has intensified attention on discussions around Trump's tax-and-spending bill.
Markets are keeping a close eye on Trump's giant tax bill, as a reportedly frustrated president urges Republican lawmakers to put their demands on the back burner so it can progress. Anxieties about the budget bill and the US debt have helped push up US bond yields. The 30-year Treasury yield (^TYX) jumped back above the key 5% level on Wednesday, with 10-year yields (^TNX) back above 4.5%.
The US and China have begun feuding over chips again, less than two weeks after agreeing a temporary pause in tariff hostilities. The Trump administration's warnings against using AI chips by Huawei have undermined the recent trade talks in Geneva, China said — putting the fragile trade deal at risk and reviving worries about economic fallout.
Nvidia (NVDA) CEO Jensen Huang said Wednesday the US curbs on exports of AI chips were "a failure" that had boosted Chinese alternatives and cost American companies billions of dollars in lost sales.
Read more: The latest on Trump's tariffs
Tariffs are in focus for Target's (TGT) first quarter results, after Trump told retailers they need to "eat" the costs of duties and not pass them on to customers.
The discount retailer missed badly on quarterly earnings and cut its full-year outlook, but its top executives repeatedly declined to say whether Target will follow Walmart (WMT) in passing on costs of tariffs via price hikes. Other retailers on Wednesday's docket include Lowe's (LOW), TJX Companies (TJX), and Urban Outfitters (URBN).
Currency concerns also have alarm bells ringing as the US dollar fell to a two-week low with traders eyeing the ongoing G-7 meeting for signs the Trump administration may favor a weaker currency.
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Target falls more than 7% at the open
Target shares fell more than 7% in early trading after posting earnings results that weaker-than-expected and warning of a potential drag from tariffs.
Read more on Target's results from Yahoo Finance's Brian Sozzi here.
Bond market jitters rise on 'narrative shift' from positive tariff news to mounting US debt crisis
Long-term Treasury yields continued to surge in the aftermath of Moody’s US credit downgrade.
The 30-year Treasury yield (^TYX) rose above the closely watched 5% level on Wednesday morning. It also briefly broke above that threshold on Monday before retreating,
Yahoo Finance's Allie Canal reports:
UnitedHealth stock falls on HSBC downgrade, report that it paid nursing homes to reduce hospital transfers
More losses are weighing on UnitedHealth Group stock (UNH), which traded % lower an hour ahead of the opening bell.
First, HSBC downgraded UnitedHealth shares to Reduce from Hold and slashed its price target by around 45% to $270, a Street low. The analysts cited UnitedHealth's leadership change and pulled guidance as risks to earnings going forward.
Also on Wednesday, the Guardian reported that the healthcare conglomerate secretly paid nursing homes thousands in bonuses to help cut hospital transfers for ailing residents, per Reuters. The move is said to have saved the company millions while risking the health of residents.
UnitedHealth, which is the largest Dow (^DJI) component by weight, has been a drag on the index recently. My colleague Anjalee Khemlani detailed a timeline of UnitedHealth's downward spiral over the past two years, which you can read here, as a cyberattack, the killing of its health insurance business's CEO, and a DOJ investigation have set shares back.
Lowe's stock rises on earnings following Home Depot's mixed quarter
Lowe's stock (LOW) popped 2% on Wednesday after delivering earnings that beat subdued expectations after years of post-pandemic struggles.
Yahoo Finance's Brooke DiPalma writes:
Target badly misses on earnings, slashes guidance
Target (TGT) stock fell over 3% premarket on Wednesday after the retailer reported first quarter results that came in shy of Wall Street's expectations.
Target earnings again fell behind the pace set by rival retailer Walmart (WMT), offering a tough comparison.
Yahoo Finance's Brian Sozzi reports:
Wolfspeed stock plummets on report it's set for bankruptcy
Shares of Wolfspeed (WOLF) plunged over 60% on Wednesday on the heels of a report that the semiconductor supplier is getting ready to file for bankruptcy within weeks.
The company is pursuing a Chapter 11 plan as it struggles to tackle its debt pile, per The Wall Street Journal report.
Reuters reports:
Bloomberg terminal outage hits traders
Traders faced a widespread outage to Bloomberg's terminal early on Wednesday morning that hampered a UK auction of government debt, per several media reports.
The disruption and delays to the markets data service took hold at around 4:30 a.m. ET and weren't fixed until about 6 a.m.
The Financial Times reported:
Read more here (premium).
Good morning. Here's what's happening today.
Dollar continues to fall as US debt problems come into focus
The dollar (DX=F) sank to a two-week low overnight Tuesday as the US's mounting debt concerns continue to impact the greenback. A Group-of-7 meeting currently underway in Banff, Canada, has brought the administration's approach towards buoying the dollar to the minds of investors.
Bloomberg reports:
Oil jumps as CNN reports Israel has plans to attack Iran
CNN has reported that Israel is in its final stages of preparing an attack on Iran, leading to oil prices jumping.
Bloomberg reports:
