Wall Street edges lower as some steam comes out of its recent rally

NEW YORK (AP) — U.S. stock indexes are drifting lower as momentum slows for Wall Street after it rallied from a deep hole nearly all the way back to its all-time high set earlier this year. The S&P 500 was down 0.3% in early trading Tuesday. The Dow Jones Industrial Average slipped 22 points, and the Nasdaq composite was down 0.4%. Treasury yields and the U.S. dollar were relatively stable. Home Depot rose after reporting better revenue than analysts expected for the start of the year. The company

also said it’s sticking with its forecasts for profit and sales growth over the full year.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

U.S. markets edged lower before the opening bell Tuesday as the earnings season nears its end and the last major corporations post their quarterly performances.

Futures for the S&P 500 lost 0.2%, while futures for the Dow Jones Industrial Average were flat. Nasdaq futures are down 0.2%.

Home Depot rose more than 2% in premarket after the hardware store chain beat Wall Street sales targets and reaffirmed previous sales growth projections despite an ongoing housing market slump.

Target and Home Depot rival Lowe’s report their latest results on Wednesday.

Home Depot's strong report comes even as many companies — particularly retailers — have lowered or pulled guidance due to uncertainty over President Donald Trump's tariffs.

How Trump's tariffs play out remains to be seen and uncertainty has been the prominent theme since he started rolling them out early this year. Many of the import taxes have been since been lowered or delayed, most recently with China. Markets soared last week after the the world's two largest trading partners announced a 90-day pause on their tariff battle.

In comments at its annual investor conference on Monday, JPMorgan CEO Jamie Dimon suggested that geopolitical risks — presumably including trade wars — remain a major risk for the global and U.S. economies. Dimon said that stagflation — a recession with inflation — would be a worst-case scenario.

“I think the odds of that are probably two times of what the market thinks,” Dimon said.

Elsewhere, global markets rallied Tuesday after China cut key interest rates to help fend off an economic malaise worsened by trade friction with Washington.

China's central bank made its first cut to its loan prime rates in seven months in a move welcomed by investors eager for more stimulus as the world's second largest economy feels the pinch of Trump's higher tariffs.

The People's Bank of China cut the one-year loan prime rate, the reference rate for pricing all new loans and outstanding floating rate loans, to 3.00% from 3.1%. It cut the 5-year loan prime rate to 3.5% from 3.6%.

With China's chief concern being deflation due to slack demand rather than inflation, economists have been expecting such a move. Data reported Monday showed the economy under pressure from Trump's trade war, with retail sales and factory output slowing and property investment continuing to fall.

Tuesday's cuts probably won't be the last this year, Zichun Huang of Capital Economics said in a report.

“But modest rate cuts alone are unlikely to meaningfully boost loan demand or wider economic activity,” Huang said.

Shares in China’s CATL, the world’s largest maker of electric batteries, jumped 16.4% in its Hong Kong trading debut after it raised about $4.6 billion in the world’s largest IPO this year. Its shares traded in Shenzhen, mainland China’s smaller share market after Shanghai, gained 1.2% after dipping earlier in the day.

Hong Kong's Hang Seng gained 1.5% to 23,681.48, while the Shanghai Composite index advanced 0.4% to 3,380.48.

In Tokyo, the Nikkei 225 inched up 0.1% to 37,529.49, while Australia's S&P/ASX 200 rose 0.6% to 8,343.30.

South Korea's Kospi lost 0.1% to 2,601.80, while the Taiex in Taiwan was nearly unchanged.

India's Sensex lost 0.8%.

In midday European trading, Germany’s DAX and the CAC 40 in Paris each rose 0.4%. Britain’s FTSE 100 was up 0.6%.

The Reserve Bank of Australia reduced its benchmark interest rate by a quarter percentage for a second time this year, to 3.85%, judging inflation to be within its target range. The earlier reduction, in February, was Australia’s first rate cut since October 2020.

U.S. benchmark crude oil lost33 cents to $61.81 per barrel. Brent crude, the international standard, shed 36 cents to $65.18 per barrel.

The U.S. dollar fell to 144.60 Japanese yen from 144.86 yen. The euro ticked up to $1.1248 from $1.1244.