Earnings Misses and Geopolitical Tensions Weigh on Stocks

The stock market stumbled on Tuesday as disappointing earnings from several high-profile companies, renewed geopolitical jitters, and broad weakness in mega-cap names led to a risk-off tone that pressured the major averages. The S&P 500 fell 0.5%, the Nasdaq Composite lost 0.9%, and the Dow Jones Industrial Average declined 0.7%. Smaller stocks underperformed sharply, with the Russell 2000 sliding 1.5% and the S&P Mid Cap 400 down 1.2%, as investors sought safety in defensive sectors.

Technology, communication services, and consumer discretionary stocks bore the brunt of the selling. Netflix plunged 10% after missing earnings estimates despite topping revenue expectations, blaming a one-time Brazilian tax charge that erased what would have been a beat on operating income. The sell-off dragged the communication services sector lower throughout the day.

The information technology sector also faltered after Texas Instruments disappointed investors with weaker-than-expected results and soft guidance, sparking a 2.4% drop in the PHLX Semiconductor Index. Apple slipped 1.6% on reports of weaker-than-expected demand for its new iPhone Air, while the overall tech complex struggled to maintain early support.

Mega-cap stocks remained under pressure, weighing on the broader market. Amazon and Tesla both declined ahead of Tesla’s closely watched earnings report after the close. The Vanguard Mega Cap Growth ETF fell 0.7%, while high-beta names also faced selling pressure, sending the Invesco S&P 500 High Beta ETF down 1.4%.

Industrial stocks were another sore spot, dropping 1.3% as GE Vernova missed estimates and defense names gave back a portion of their recent gains.

Not all sectors shared in the pain. Energy led the market with a 1.3% advance as crude oil climbed 2.2% to $58.51 per barrel, while defensive areas such as consumer staples and health care each added 0.6%. Intuitive Surgical surged nearly 14% on a strong earnings beat, helping lift the health care group.

Sentiment took an additional hit midafternoon when Reuters reported that the Trump administration is weighing sweeping software export restrictions on China in retaliation for new rare earth controls, a story later confirmed by Treasury Secretary Scott Bessent. He also told Fox Business that major sanctions on Russia would be announced within 24 hours, stoking further geopolitical caution.

The combination of weak corporate results, renewed trade anxiety, and looming sanctions kept investors on edge, with risk appetite clearly fading into the close. As Tesla prepared to report after hours, many market participants looked to the EV giant—and its mega-cap peers—to steady sentiment at a time when confidence remains fragile and volatility is on the rise.

Our FTinvest 11 model portfolio extended its rebound today, gaining 0.45% to close at 846.76 after a volatile session that saw early enthusiasm give way to afternoon consolidation. The index flirted with the 850 mark during the first half of the session, but selling pressure in the latter hours trimmed gains, leaving the advance more measured by the close.

The day began on a strong note as upbeat market sentiment lifted most of the portfolio’s core growth names. A financial component provided much of the early momentum, echoing strength in the broader U.S. equity benchmarks. However, by midday, buyers began to take profits, and the index gradually slipped off its highs as the market turned more selective.

Despite the loss of altitude, breadth within FTinvest 11 remained positive. The mild afternoon fade reflected a combination of consolidation after a sharp early push and investors’ continued caution around mixed earnings trends across the broader market.

The final result—a steady 0.45% rise—extends the portfolio’s modest winning streak and keeps the index comfortably above last week’s lows. With the 850 level now proving a short-term resistance point, attention will turn to whether renewed strength in technology and discretionary leaders can carry FTinvest 11 toward a sustained breakout as earnings season progresses.