S&P500 Today: Nervous US Stock Market Eyes Fed Policy Outlook and September Cut Odds

S&P 500 Retreats from Highs as Disappointing Earnings and Fed Uncertainty Weigh on Sentiment

The S&P 500 slipped Tuesday afternoon, pulling back from record levels as lackluster earnings from UnitedHealth, Boeing, and UPS rattled confidence ahead of the Federal Reserve’s policy decision. The index declined 0.3%, pressured by weakness in healthcare, industrials, and consumer discretionary sectors. Traders also remained cautious as tariff developments added to an already uncertain outlook.

What Dragged the S&P 500 Lower?

Healthcare stocks were a notable drag, with UnitedHealth tumbling 5.3% after issuing a disappointing profit forecast. The broader healthcare sector declined 0.6%, with Merck down over 3%.

Industrials followed closely, dropping 1.2% as Boeing fell 3.7% despite narrowing losses. Weak results from UPS and Stanley Black & Decker, down 9% and nearly 8% respectively, added further weight to the sector.

The consumer discretionary sector declined 0.7%, hit by a 10.8% plunge in Whirlpool, which cut its dividend and annual guidance citing tariff pressure. Carrier Global and Johnson Controls also fell sharply, down 11% and nearly 6%, respectively.

Is Tariff Pressure Intensifying Across Key Sectors?

UPS blamed disappointing results on the expanding U.S. tariff regime, which is now beginning to impact multinational logistics and consumer companies.

The Dow Jones Transportation Average dropped 2.1%, falling to a one-week low. New threats of a 15% to 20% “world tariff” from President Trump raised concerns of further earnings deterioration if global trade talks falter.

Meanwhile, Whirlpool’s miss underscored the impact of input cost inflation across manufacturing. Trade tensions with India and China remain unresolved, with negotiations in Stockholm ongoing and India preparing for new tariff rounds.

Where Did Traders Seek Relative Safety or Opportunity?

Technology provided a limited buffer, rising just 0.02%, buoyed by sharp gains in semiconductors and design software stocks. Corning surged over 13%, Cadence Design rose 9%, and Synopsys added 6.5%. AMD and Texas Instruments also posted solid gains ahead of earnings from Microsoft, Meta, Amazon, and Apple.

Utilities and real estate outperformed, gaining 0.7% and 1.4% respectively, as traders hedged against downside risk with defensive positioning.

What’s Next for the Market Heading into the Fed Decision?

The Federal Reserve kicked off its two-day meeting Tuesday, with no rate change expected. Still, market focus is on Chair Powell’s tone and guidance. According to the CME FedWatch tool, there’s a 61.6% probability of a rate cut in September.

With earnings from key tech names due and tariff talks ongoing, traders should prepare for continued volatility. Market direction may hinge on whether the Fed signals a path toward easing and if major tech results sustain growth expectations.

More Information in our Economic Calendar.