Stock Market Today: Cautious Investors Let Stocks Drift Lower
Markets weigh encouraging trends for earnings and tariffs against concerning signals from U.S. consumers.



It was another gap-down day for the main equity indexes with earnings season winding down and no hard economic data incoming to move markets. However, there was no recovery late Tuesday.
What looks like relatively normal price action still masks many questions about the impact of the Trump administration's policy on global trade and broad sentiment.
As Morgan Stanley Director of Global Research Katy Huberty writes in a May 20 summary of her firm's recently published research, "Earnings season has turned out to be better than feared, in terms of both EPS surprise and guidance."

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Huberty observes that capital expenditure budgets "are down slightly" and layoffs "are up modestly" quarter over quarter, but says these trends are not "extreme" in any context. (The Bureau of Labor Statistics will release its next jobs report on June 6.)
Huberty concludes that if guidance, capex forecasts and layoff plans "were not markedly pessimistic during first-quarter reporting season when tariff anxiety was at its highest, they are even less likely to break down now after the recently announced tariff deal with China."
At the closing bell, the blue-chip Dow Jones Industrial Average lost 0.3% to 42,677, the broad-based S&P 500 Index fell 0.4% to 5,940, and the tech-heavy Nasdaq Composite shed 0.4% to 19,142.
D-Wave Quantum reaches the cloud
D-Wave Quantum (QBTS) soared 25.7% Tuesday after management announced that its sixth-generation Advantage2 quantum system is now available over the cloud. QBTS is volatile but remains one of the most viable ways to invest in quantum computing.
Advantage2 succeeds D-Wave's Advantage system, which was released in September 2020. The commercial-grade system includes D-Wave's most advanced quantum process to date. D-Wave says it's built for real-world use in optimization, materials simulation and artificial intelligence (AI).
"Fundamentally, this is energy-efficient computing for hard problems," Chief Development Officer Trevor Lanting told Barron's.
D-Wave CEO Dr. Alan Baratz said in a statement that Advantage2 is "an engineering marvel, with substantial technical advancements that highlight D-Wave's progress in scaling quantum technology to meet industry demands for growing computational processing power while maintaining energy efficiency."
Baratz emphasized that D-Wave is "helping customers realize value from quantum computing right now," highlighting Advantage2 as "a remarkable achievement in delivering on that mission."
Home Depot holds it down
Home Depot (HD) reported fiscal first-quarter earnings of $3.56 per share, below a FactSet-compiled consensus estimate of $3.60, but sales were up 9.4% to $39.9 billion and exceeded a forecast of $39.3 billion. HD stock was lower by 0.6%.
Management also reiterated full-year guidance and told The Wall Street Journal Home Depot won't raise prices because of tariffs.
Same-store sales were down 0.3% year over year vs a forecast for a 0.1% decline. U.S. same-store sales rose 0.2%. According to FactSet, Home Depot had beaten earnings expectations for 19 consecutive quarters.
"We don't see broad-based price increases for our customers at all going forward," said Billy Bastek, executive vice president of merchandising, during Home Depot's conference call. "It's a great opportunity for us to take share, and it's a great opportunity for our suppliers to take share as well."
Management said more than 50% of Home Depot's suppliers are based in the U.S., but will also diversify the countries it sources from, increase productivity and stop selling more tariff-sensitive products in response to prevailing policy.
CEO Ted Decker said in a statement that Home Depot saw "continued customer engagement across smaller projects." But higher interest rates have discouraged consumers from bigger projects and purchases.
"We continue to see softer engagement in larger discretionary projects where customers typically use financing to fund the project, such as kitchen and bathroom remodels," Bastek said.
A whole bunch of Fed speakers
The economic calendar is short of hard data this week but it's full of speeches by Federal Reserve officials.
We heard from four on Monday and four more on Tuesday. If the tone is "cautious" ahead of the next Fed meeting, the theme is "uncertainty."
Speaking to Bloomberg at the Federal Reserve Bank of Atlanta's 2025 Financial Markets Conference, Atlanta Fed President Raphael Bostic reiterated that he expects the central bank to make one rate cut in 2025 because of uncertainty created by President Donald Trump's tariffs policy.
Bostic noted, however, that progress on negotiations between the Trump administration and U.S. trading partners would mean the Fed "may be able to pull forward some of our actions, because there may not be as much that we need to do in terms of managing the price level."
During a Q-and-A session at the Atlanta Fed conference, Fed Vice Chair Philip Jefferson said the central bank must be mindful of the impact of its decisions on the price level and that monetary policy "is not converted into a sustained increase in inflation."
Jefferson also underscored "the level of uncertainty" to explain the Fed's patience. "I believe that it is appropriate that we wait and see how the policies evolve over time and their impact," he added.
In her remarks at the conference, Dallas Fed President Lorie Logan focused on the central bank's mechanisms for stabilizing money-market rates during times of heightened financial market stress.
"These markets are extraordinarily strong, deep and liquid, as befits their systemic role," Logan said. "But they are not invulnerable."
Appearing at a business conference in Manhattan, New York Fed President John Williams said that tariff uncertainty means households and businesses have paused big spending plans. "It's not going to be that in June, we're going to understand what's happening, or July," Williams said.
"It's going to be a process of collecting data, getting a better picture, and watching those things develop."
Related content
- Earnings Calendar and Analysis for This Week (May 19-23)
- What's Next for Stocks After a Chaotic Spring
- Best Blue Chip Stocks: 21 Hedge Fund Top Picks
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

David Dittman is the former managing editor and chief investment strategist of Utility Forecaster, which was named one of "10 investment newsletters to read besides Buffett's" in 2015. A graduate of the University of California, San Diego, and the Villanova University School of Law, and a former stockbroker, David has been working in financial media for more than 20 years.
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears Ebb
Constructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
What Trump’s 'Big Beautiful Bill' Means for Your Utility Bills
If passed, the 'Big Beautiful Bill' could make home energy upgrades more expensive and raise monthly costs. Here's how much more you might pay and how to prepare.
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears Ebb
Constructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)
Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your Business
Selling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or Relocate
Homeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and Friends
What starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.