Most US stocks slump, but Nvidia nudges Nasdaq to another record
[July 16, 2025] By
STAN CHOE
NEW YORK (AP) — Most U.S. stocks slumped on Tuesday after the latest
update on inflation hurt Wall Street’s hopes for lower interest rates.
The S&P 500 fell 0.4%, though it’s still near its all-time high set last
week, as 90% of the stocks within the index fell. The Dow Jones
Industrial Average dropped 436 points, or 1%.
Tech stocks were an outlier, though, and the Nasdaq composite rose 0.2%
to set another record thanks to Nvidia, the market’s most influential
stock.
Stocks felt pressure from a report showing inflation in the United
States accelerated to 2.7% last month from 2.4% in May. Economists
pointed to increases in prices for clothes, toys and other things that
tend to get imported from other countries. Their prices could be rising
because of the tariffs that President Donald Trump has proposed on
countries worldwide in hopes of getting them to open their markets
further to U.S. products.
“Inflation has begun to show the first signs of tariff pass-through,”
according to Ellen Zentner, chief economic strategist for Morgan Stanley
Wealth Management.
To be sure, the inflation rate reported on Tuesday morning wasn’t far
from what economists expected. And an underlying measure of inflation
that economists think is a better predictor of future trends accelerated
by less than feared.
Altogether, the data helped cause Treasury yields to yo-yo a few times
in the bond market before they began rising.
The yield on the 10-year Treasury climbed to 4.48% from 4.43% late
Monday. The yield on the two-year Treasury, which more closely tracks
expectations for what the Federal Reserve will do with short-term
interest rates, rose to 3.95% from 3.90%.
A further acceleration in inflation could tie the hands of the Fed,
which has been keeping interest rates on hold this year after cutting
them at the end of last year. That’s because lower rates can give
inflation more fuel, along with a boost for the economy. Wall Street
loves lower rates because they goose prices higher for stocks and other
investments, and Trump himself has been clamoring for the Fed to cut
more quickly.
Fed Chair Jerome Powell, though, has been adamant that he wants to wait
for more data about how tariffs affect the economy and inflation.
Following Tuesday’s inflation report, traders are still overwhelmingly
betting that the Fed will cut its main interest rate by the end of the
year. But they pulled back their bets on the number of potential cuts,
according to data from CME Group.
No one knows for sure if Trump will follow through on the stiff tariffs
he’s proposed, or if he’ll flinch and back down if the economy and
financial markets show too much pain. The hope is that he’ll reach trade
deals with other countries beforehand that will lower the sky-high
tariff rates that Trump has proposed.
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Ed Curran works on the floor at the New York Stock Exchange in New
York, Monday, July 14, 2025. (AP Photo/Seth Wenig)
 Trump on Tuesday said he struck a
deal with Indonesia, where it committed to buying energy,
agricultural products and planes from the United States. Trump also
said imports from Indonesia, which is the world’s fourth-largest
country by population, would face a tariff of 19% instead of the 32%
that he had threatened earlier.
On Wall Street, tech stocks were the outliers and rose after Nvidia
said the U.S. government assured it that licenses will be granted
for its H20 chip again and that deliveries will hopefully begin
soon. Nvidia’s 4% gain was by far the strongest force pushing upward
on the S&P 500.
Earlier this year, Nvidia said that U.S. restrictions on the chips
used in artificial-intelligence development chiseled billions of
dollars off its results for the first quarter of the year.
Stocks of big U.S. banks, meanwhile, were mixed following their
latest profit reports.
JPMorgan Chase slipped 0.7% despite reporting a stronger profit than
analysts expected, as CEO Jamie Dimon warned of risks to the economy
because of tariffs and other concerns.
Citigroup rose 3.7% following its better-than-expected profit
report. But Wells Fargo fell 5.5% following its own, as it trimmed
its forecast for an important way that it makes money.
All told, the S&P 500 fell 24.80 points to 6,243.76. The Dow Jones
Industrial Average dropped 436.36 to 44,023.29, and the Nasdaq
composite rose 37.47 to 20,677.80.
In stock markets abroad, indexes slipped in Europe after a mixed
session in Asia. Indexes rose 1.6% in Hong Kong but fell 0.4% in
Shanghai after a report said China’s economic growth slowed only
slightly last quarter despite pressure from Trump’s tariffs.
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AP Business Writer Yuri Kageyama contributed.
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