Tariffs Weigh on U.S. Stocks as Investors Grow Wary

On August 5th, 2025, U.S. stock market indexes such as the S&P 500, Dow Jones, and Nasdaq experienced a decline as investors grew increasingly concerned about the impact of President Donald Trump's tariffs. The S&P 500 was down 0.5% in midday trading, while the Dow Jones Industrial Average fell 189 points, or 0.4%, and the Nasdaq composite was 0.6% lower.

The sell-off was triggered by a weaker-than-expected report on activity for U.S. businesses in the transportation, retail, and other services industries, which added to worries that the tariffs may be hurting the economy. However, the losses were somewhat mitigated by increased hopes for upcoming interest rate cuts by the Federal Reserve and stronger-than-expected profit reports from some U.S. companies.

Edgewell Personal Care, the company behind brands like Schick and Banana Boat, fell 20.2% after reporting lower profit and revenue than analysts expected, with its CEO citing a weak season for sun care in North America and the impact of tariffs. Similarly, Caterpillar's stock slipped 0.7% after its operating profit sank 18% from a year earlier, largely due to tariffs increasing its manufacturing costs.

On the other hand, AI-focused companies like Palantir Technologies and Axon Enterprise saw their stocks surge, with Palantir jumping 7.9% after reporting stronger-than-expected profits and raising its revenue forecast, while Axon leaped 15.1% on the back of growth in its AI offerings.