US stocks sink as S&P 500 falls to its first loss in 7 days

NEW YORK (AP) — U.S. stock indexes fell on Tuesday, as momentum slowed for Wall Street after it rallied from a deep hole nearly all the way back to its all-time high set earlier this year.

The S&P 500 fell 0.4% for its first drop in seven days, but it’s still within 3.3% of its record. The Dow Jones Industrial Average lost 114 points, or 0.3%, and the Nasdaq composite slipped 0.4%.

Treasury yields and the value of the U.S. dollar held relatively stable following a brief jolt Monday morning after Moody’s Ratings said the U.S. government no longer deserves a top-tier credit rating because of worries about its spiraling debt.

Several of the U.S. stock market’s worst losses came from companies in the travel industry, as doubts continue about how much U.S. households will be able to spend on vacations.

Airbnb dropped 3.3%, Norwegian Cruise Line fell 3.9% and United Airlines lost 2.9%. Viking Holdings fell 5% even though the company, which offers river cruises and other trips, reported stronger results than analysts expected for the latest quarter.

Home Depot slipped 0.6% after reporting a profit for the start of the year that came up just short of analysts’ expectations, though its revenue topped forecasts. The home-improvement retailer also said it’s sticking with its forecasts for profit and sales growth over the full year.

That’s counter to a growing number of companies, which have recently said tariffs and uncertainty about the economy are making it difficult to guess what the upcoming year will bring.

President Donald Trump has launched stiff tariffs against trading partners, only to delay or roll many of them back. Investors are hopeful that Trump will eventually lower his tariffs after reaching trade deals with other countries, but that’s not a certainty.

Target and Home Depot rival Lowe’s will report their latest results on Wednesday.

On the winning side of Wall Street was D-Wave Quantum, which jumped 25.9% after releasing its latest quantum computing system. The company says it can solve complex problems beyond the reach of classical computers.

All told, the S&P 500 fell 23.14 points to 5,940.46. The Dow Jones Industrial Average dipped 114.83 to 42,677.24, and the Nasdaq composite dropped 72.75 to 19,142.71.

In the bond market, the yield on the 10-year Treasury edged up to 4.47% from 4.46% late Monday. The two-year yield, which more closely tracks expectations for action by the Federal Reserve, edged down to 3.96% from 3.97%.

Concern still remains that Trump’s tariffs could push the U.S. economy into a recession, even if it’s held up OK for the time being. If a recession were to hit, the U.S. government may have less room to offer support for the economy through big spending plans or direct stimulus checks to households than in prior downturns. That’s because the U.S. government’s debt is so much higher now, and it could be set to get even bigger with Washington debating more cuts to taxes.

If the U.S. government can’t offer as much fiscal support for the economy, that could make the next recession deeper and last longer, according to James Egelhof, chief U.S. economist and other strategists at BNP Paribas. That could put more pressure on the Federal Reserve to prop up the economy by itself through lower interest rates.

Other central banks around the world have already begun cutting interest rates.

China’s central bank made its first cut to its loan prime rates in seven months in a move welcomed by investors eager for more stimulus as the world’s second-largest economy feels the pinch of Trump’s higher tariffs. Tuesday’s cuts probably won’t be the last this year, Zichun Huang of Capital Economics said in a report.

The Reserve Bank of Australia reduced its benchmark interest rate by a quarter of percentage point for a second time this year, to 3.85%, judging inflation to be within its target range. The earlier reduction, in February, was Australia’s first rate cut since October 2020.

Following the cuts, stock indexes rose across much of the world. Hong Kong’s Hang Seng jumped 1.5% for one of the bigger gains.

Shares in China’s CATL, the world’s largest maker of electric batteries, jumped 16.4% in its Hong Kong trading debut after it raised about $4.6 billion in the world’s largest IPO this year. Its shares traded in Shenzhen, mainland China’s smaller stock market after Shanghai, gained 1.2% after dipping earlier in the day.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.