Dow rises, GM dips on tariff fears as meme stocks rekindle retail fervor
Major U.S. stock indices remained largely flat near record highs on Tuesday as investors digested mixed earnings reports and growing concerns over tariffs, with General Motors shares plunging 6% despite beating estimates amid tariff-related worries. Meanwhile, heightened attention on the Federal Reserve’s leadership and a resurgence of memestock trading added volatility to the market
On Tuesday, July 22:
- Dow Jones was up 125 points or 0.28%
- The S&P 500 was little change with 0.07% gain.
- The tech-focused Nasdaq was down 0.30%.
Tariffs remain a significant concern for investors. General Motors’s 6% dip was mainly due to fears that the effects of U.S. tariffs may have on the demand for new vehicles.
Traders were also focused on the ongoing White House’s comments over the Federal Reserve’s leadership. On Tuesday, Donald Trump and his Treasury Secretary Scott Bessent softened their rhetoric on the Fed Chair Jerome Powell.
Bessent said that he does not mean that the Fed Chair should step down immediately, in relation to the Fed’s renovation scandal. However, he said that there should be an internal investigation. At the same time, Trump denied he plans to fire Powell ahead of his term. “I think he’s done a bad job, but he’s going to be out pretty soon,” he stated.
Memestock craze continues
Unlike the rest of the stock market, the so-called memestocks are back in focus. Shares of the struggling retailer Kohl’s were up 30%, as retail investors showed interest in the company, triggering a halt.
This story follows a similar pattern to that of Opendoor, another retail trader that has long been the focus of short sellers. Its stock doubled in premarket trading, surging to more than $20 per share, before the big players stepped in on the market open.
Retail firms have been consistently under threat from short sellers during the COVID pandemic, as the rise of online shopping has undercut their market position. Still, the case of GameStop suggested that concentrated retail traders could move the market, at least for a while.
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