US stocks retreated on Tuesday, giving up the gains from the previous session, as renewed trade tensions between Washington and Beijing weighed on sentiment.
The Dow Jones Industrial Average fell 416 points, or 0.9%, while the S&P 500 slipped 1.1% and the Nasdaq Composite dropped 1.6%.
The sell-off was led by the major artificial intelligence stocks that powered the market’s rally earlier this year but have recently come under pressure.
Nvidia declined more than 3%, while Tesla and Oracle lost 2.5% and 1.4%, respectively.
The renewed decline followed news that China imposed sanctions on five US subsidiaries of South Korea’s Hanwha Ocean, barring Chinese entities and individuals from doing business with them.
Beijing said the measures were intended to “strengthen China’s security.”
US Treasury Secretary Scott Bessent told the Financial Times that China’s move reflects “economic weakness,” suggesting that its leaders “want to pull everybody else down with them.”
Tensions have been escalating since late last week, when President Donald Trump threatened to impose an additional 100% tariff on Chinese imports, triggering a steep sell-off that saw the Dow drop more than 800 points on Friday — its worst day since April.
Markets rebounded sharply on Monday after Trump sought to reassure investors, saying on Truth Social: “Don’t worry about China, it will all be fine.”
The S&P 500 and Dow each gained more than 1%, marking their strongest session in weeks.
“Trade policy remains a key driver for US financial markets this year, and last week saw a sharp re-escalation in tensions between the US and China,” said Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management, in a note.
Wall Street banks open earnings season with strong results
Major US financial institutions kicked off the new earnings season on a strong note, with JPMorgan Chase, Goldman Sachs, BlackRock, and Wells Fargo all posting results that beat analyst expectations.
JPMorgan Chase reported third-quarter revenue of $46.4 billion, up 9% from the same quarter last year, surpassing forecasts.
The bank’s net income rose 12% to $14.4 billion, while diluted EPS came in at $5.07, a 16% annual increase.
The performance was underpinned by record trading revenue of nearly $9 billion.
Goldman Sachs also delivered robust results, reporting record quarterly revenue of $15.18 billion, a 20% year-on-year surge, and net earnings of $4.10 billion, up 37%.
Diluted EPS stood at $12.25, and return on equity reached 14.2%, reflecting strong execution across its core investment banking and trading segments.
The results came a day after Goldman announced its acquisition of venture capital firm Industry Ventures, signalling continued diversification.
BlackRock and Wells Fargo also topped Wall Street estimates, while Citi reported stronger-than-expected revenue, rounding off a broadly upbeat start to the quarter for major US lenders.
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