General Motors dropped 5.2% despite reporting a stronger profit for the spring than analysts expected. The automaker said it’s still expecting a $4 billion to $5 billion hit to its results over 2025 because of tariffs and that it hopes to mitigate 30% of that. GM also said it will feel more pain because of tariffs in the current quarter than it did during the spring.
That helped to offset big gains for some homebuilders after they reported stronger profits for the spring than Wall Street had forecast. D.R. Horton rallied 10.2%, and PulteGroup rose 7.7%. That was even as both companies said customers are continuing to deal with challenging conditions, including higher mortgage rates and an uncertain economy.
So far, the U.S. economy seems to be powering through all the uncertainty created by Trump's on-and-off tariffs. Many of Trump's stiff proposed taxes on imports are currently on pause, and the next big deadline is Aug. 1. Talks are underway with other countries on possible trade deals that could lower the proposed tariffs before they kick in.
But companies are already feeling effects. Genuine Parts, the Atlanta-based company that sells auto and industrial replacement parts around the world, trimmed its profit forecast for the full year in order to incorporate “all U.S. tariffs currently in effect,” along with its updated expectations for business conditions in the second half of the year.
Its stock rose 2.5% after it reported a stronger profit for the latest quarter than analysts expected.
Coca-Cola fell 1.6% even though it likewise delivered a stronger profit than forecast. Its revenue for the quarter only edged past analysts' expectations, and it said that higher prices that it charged helped offset sales of fewer cases during the spring.
In the bond market, Treasury yields held relatively steady as traders continue to expect the Federal Reserve to wait until September at the earliest to resume cutting interest rates.
Fed Chair Jerome Powell has been insisting he wants to see more data about how Trump’s tariffs are affecting inflation and the economy before the Fed makes its next move. That’s despite often angry criticism from Trump, who has been lobbying for more cuts to rates to happen sooner.
The yield on the 10-year Treasury eased to 4.36% from 4.38% late Monday.
In stock markets abroad, Japan’s Nikkei 225 initially jumped after reopening from a holiday on Monday but then fell back to a modest loss of 0.1%.
In Asian trading, Japan's benchmark surged and then fell back as it reopened from a holiday Monday following the ruling coalition's loss of its upper house majority in Sunday's election. The Nikkei 225 shed 0.1%.
Analysts said the market initially climbed on relief that Prime Minister Shigeru Ishiba vowed to stay in office despite a loss for his ruling coalition in an upper-house election Sunday. But the results have only added to political uncertainty and left his government without the heft needed to push through legislation.
A breakthrough in trade talks with the U.S. might win Ishiba a reprieve, but so far there’s been scant sign of progress in negotiating away the threat of higher tariffs on Japan’s exports to the U.S. beginning Aug. 1.
Indexes were mixed elsewhere in Asia and dipped across much of Europe.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.