The S&P 500 hovered near the flatline Tuesday as traders worked to recover from Monday’s tariff-driven sell-off while weighing fresh policy signals from the White House. The Nasdaq rose 0.3%, supported by chipmakers, while the Dow slipped 61 points after losing more than 400 points the previous session.
President Trump suggested flexibility on the newly announced Aug. 1 tariff deadline, saying it is “not 100% firm” if countries engage in talks. The new measures target imports from South Korea, Japan, South Africa and others, but traders questioned whether the new 25% tariffs would be fully enforced, with some suggesting the worst trade war fears have passed.
Solar stocks came under pressure following Trump’s executive order rolling back green energy subsidies to align with tax policy changes. Sunrun tumbled over 7%, Enphase dropped 3.7%, and First Solar slid 2.6% in early trade as investors reassessed subsidy-linked growth expectations in the sector.
Nvidia shares gained 0.6%, continuing momentum toward a $4 trillion market cap as traders leaned back into AI leaders. Tesla rebounded 2% after a steep Monday decline, while Datadog slipped over 2% following a downgrade to sell at Guggenheim, which warned of potential revenue risk if OpenAI moves certain workloads in-house.
Financial stocks were mixed as HSBC downgraded JPMorgan and Goldman Sachs to reduce from hold, while Bank of America dropped 2% after being cut to hold from buy. The sector remains in focus ahead of the upcoming earnings season, with traders watching net interest income guidance and capital allocation updates as rate cut discussions continue.
Vertiv Holdings climbed 2.8% after Melius Research upgraded the AI infrastructure stock to buy, citing renewed AI spending trends. KeyCorp gained 1% after UBS upgraded it to buy, noting strong loan momentum and potential upside in net interest income. Coinbase added 1% after securing a $20 million credit facility with KULR Technology, while Chemours rallied over 10% despite no clear catalyst, building on its recent momentum.
Traders will monitor July earnings for banks and tech leaders while gauging tariff enforcement signals from the White House.
Treasury yields and the Federal Reserve’s commentary on potential rate cuts remain key for risk sentiment, while sector rotation flows could continue to shape early July positioning.
Caution remains warranted, but selective buying is emerging in AI and tech names while solar and financials remain under pressure.
More Information in our Economic Calendar.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.