Dow Jones - 40,381.00 (-0.48%)

Nasdaq - 18,659.25 (-1.59%) 

S&P 500 - 5,374.25 (-0.99%)

• A set back on Tuesday. U.S. and global equities finished broadly higher on Monday after the U.S. administration temporarily paused tariffs on consumer electronics, including smartphones and semiconductors but did indicate that these will soon be added back to a new category of sector tariffs. But then China halted purchases and deliveries of Boeing jets and aircraft equipment from the United States as a response. The Dow, S&P 500, and the Nasdaq drifted lower on Tuesday. The S&P 500 is down about 8% this year, while the tech-heavy Nasdaq is lower by about 13%.
• A bright side? All major indexes are still trading at or below their 10-year historical forward price-to-earnings multiples, potentially setting the stage for improved long-term returns.
• Gold rallied. Gold traded above $3,245 an ounce on Monday, surpassing Friday’s previous record.
• Key data today and Thursday. Today new data from the Census Bureau will emerge on retail sales as warnings of an economic slowdown pile up on Wall Street. March housing starts and building permits will be released on Thursday.
• 'Soft Landing' not expected anymore. Investors' consensus view of the macroeconomy has significantly changed. In the latest Bank of America Fund Managers Survey released on Tuesday, 49% of respondents said they expect a "hard landing" for the global economy. This is where economic growth deteriorates before inflation fully retreats — in the next 12 months. Last month, just 11% of respondents had expected this outcome. In the latest survey conducted from April 4 to April 10, only 37% of respondents said they expect a soft landing. This is down from 64% expecting a soft landing a month ago.
• Yield news. Monday saw stabilization in the bond market, with the 10-year Treasury yield falling to 4.38% after an unexpected rise to 4.50% last week.
• Bank earnings are surpassing estimates. The first-quarter earnings season officially kicked off last Friday, with major banks in the spotlight. Companies like J.P. Morgan, Goldman Sachs, Morgan Stanley, Bank of America, and Citibank have all reported earnings so far. Shares of Bank of America surged Tuesday morning after the financial giant's first-quarter results came in better than expected. The bank recorded earnings per share (EPS) of $0.90 on revenue of $27.37 billion. Analysts were projecting $0.82 and $26.80 billion, respectively, per Visible Alpha. Citigroup on Tuesday also posted first-quarter results that exceeded analysts’ estimates as the firm’s traders generated more revenue than expected. The bank’s fixed income traders generated $4.5 billion in revenue on heightened activity in markets for currencies and government bonds, 8% more than a year earlier.
• Palantir jumped by about 5% Tuesday afternoon after penning a deal with NATO. NATO said it would begin using Palantir’s technology — the Maven Smart System NATO (MSS NATO) in the next 30 days.
• United Airlines stock soared. The company Q1 revenue expectations in an early report for the major airline. 
• AI chip maker Nvidia dropped over 6% in extended trading on Tuesday. The move followed the news that the US government has restricted the exports of H20 chips to China.
• Johnson & Johnson stock fell around 1% on Tuesday despite a beat on first quarter earnings.
• Retail names dropped broadly across the sector including Amazon, Lowe’s, and Nike seeing roughly 2% losses.
• Shares in multinational brokerage firm Interactive Brokers sank in extended trading. The company missed earnings estimates in Q1 reports. 
• United Health Services Inc. fell. Baird downgraded the operator of acute care hospitals to "Neutral" from "Outperform" and cut their price target on the stock to $224.00 from $274.00. 
• Howmet Aerospace Inc. shares went lower. Wells Fargo downgraded the aerospace & defense company to "Equal Weight" from "Overweight" and cut their price target on the stock to $118.00 from $132.00.

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Retail sales "should provide some helpful evidence of the pace of consumer spending," Federal Reserve Governor Christopher Waller said Monday, adding that weak readings earlier this year may have reflected seasonal factors like harsh winter weather. 

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Most Active Stocks

• JNJ (JNJ)
• Nvidia (NVDA)
• United Airlines Holding (UAL)
• Interactive Brokers (IBKR)
• The Boeing Company (BA)
• Advanced Microdevices (AMD)
• Bank of America (BAC)
• Rocket Lab USA (RKLB)
• Forge Global Holdings (FRGE)
• Tesla (TSLA)

Weekly Notables

Nvidia Issued a Warning About China

AI chip maker Nvidia dropped over 6% in extended trading on Tuesday following the news that the US government has restricted the exports of H20 chips to China. The government informed Nvidia on Monday that the H20 would require a license to export to China “for the indefinite future.” The new rules address Washington’s concerns that “the covered products may be used in, or diverted to, a supercomputer in China,” the company said in a filing Tuesday. Nvidia warned it will report about $5.5 billion in writedowns during the current quarter, tied to inventory and commitments for the chip.

United Airlines Says Economy is Impossible to Predict

United Airlines on Tuesday maintained its full-year forecast but was reluctant about a second forecast should the U.S. slip into a recession. The company called economy “impossible to predict.” United Airlines said its first-quarter earnings that a recession could drive down profits this year, but said booking trends are stable. The company left in place expectations issued in January for adjusted earnings per share of $11.50 to $13.50, but said that in a recession, it would expect to earn between $7 per share and $9 per share on an adjusted basis. “The Company’s outlook is dependent on the macro environment which the Company believes is impossible to predict this year with any degree of confidence,” it said in a securities filing. 

The healthcare device company will be announcing earnings results today before the bell. The company met analysts’ revenue expectations last quarter, reporting revenues of $10.97 billion, up 7.2% year on year. It was a decent quarter for the company, with organic revenue and EPS in line with analysts’ estimates. This quarter, analysts are expecting Abbott Laboratories’s revenue to grow 4.3% year on year to $10.39 billion, improving from the 2.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.07 per share.