US stocks closed lower as investors examined the impact of tariffs after Yum Brands and several other companies raised the issue of trade duties in their reports or forecasts.
KFC parent Yum Brands fell 5.1% after the company missed its second-quarter revenue estimate, affected by high trade duties that are suppressing consumer spending.
Caterpillar warned that US tariffs would be a major challenge in the second half of this year and could cost up to $1.5 billion by 2025, but its shares ended down 0.1%.
The Dow Jones Industrial Average fell 0.14% to 61.90 points, the S&P 500 fell 0.49% to 30.75 points, while the technology-focused Nasdaq fell 0.65% to 137.03 points.
In other developments, the US trade deficit narrowed in June due to a sharp decline in consumer goods imports, while the trade gap with China fell to its lowest level in more than 21 years.
Meanwhile, President Donald Trump said the US would likely impose a “small tariff” on pharmaceutical imports with the potential for future rate increases.
He also hinted that an announcement on tariffs on semiconductors and chips could be made in the next week or so.
Despite the earnings season winding down, investors are still awaiting a number of key results on Wednesday, including from Walt Disney and McDonald’s, which are scheduled to report their results.
Volume on US exchanges recorded $16.29 billion compared to an average of $18.33 billion over the full 20 trading days.
