U.S. stocks ended higher at the close of a choppy session of trading as investors considered the prospect of new tariffs on goods produced in the European Union.
The S&P 500 (^GSPC) rose 0.29%, or 8.68 points, as of market close. The Dow (^DJI) edged up 0.26%, or 69.25 points, while the Nasdaq (^IXIC) advanced 0.22%, or 17.93 points.
Despite a pullback during early trading, the S&P 500 eked out a new closing high on Tuesday, ending at 2,973.01. This was the second consecutive day that the blue-chip index posted a record closing level.
Equity advances came even after the U.S. on Monday threatened to slap tariffs on about $4 billion worth of EU goods amid an ongoing World Trade Organization (WTO) case over the bloc’s subsidies of Airbus SE (AIR.PA). The WTO is set to make a ruling later this year on the case to determine the extent of the unfair subsidies to Airbus. The Trump administration has suggested the EU’s support has been at the detriment of U.S. competitor Boeing (BA).
The announcement lays the groundwork for a broadening out of the Trump administration’s multi-fronted trade war, and comes just days after President Donald Trump agreed to a halt to tariff escalation on goods made in China.
The newly proposed duties would impact EU-made goods including cheese, pasta, whiskey, certain cuts of meat and some metals, and have been suggested as a “countermeasure in response to harm caused by EU aircraft subsidies,” the U.S. Trade Representative’s Office wrote in a statement. The USTR issued a request for public comment on the additional tariffs Monday.
Meanwhile, Treasury yields fell across the curve as a move to safe haven assets resumed after Monday’s risk rally. The 10-year Treasury yield (^TNX), which moves inversely to the price, declined 5 basis points to 1.983% Tuesday afternoon Fed funds futures rose to see a 25.6% probability of a 50-basis point rate cut at the Federal Reserve’s July meeting, according to CME Group.
STOCKS
Uber (UBER) shares on Tuesday earned a new Hold rating and $50 price target from Stifel analysts. The firm acknowledged Uber’s “significant transportation and food delivery market opportunities,” but noted that key debates remain over the ride-hailing giant’s growth expectations and path to profitability. Stifel analyst Scott Devitt noted that Uber is the market leader in most regions, but competitive pressures, slower net revenue growth and uncertain future profitability justify a Hold rating.
Stifel analysts led by Devitt also raised their price target on shares of Lyft (LYFT) to $76 on Tuesday, from $70 previously, and maintained their Buy rating on the stock. Lyft’s management in May had underscored a reduction in costly rider incentives and more competitive rationalization across the ride-hailing sector, Devitt noted. He said he viewed Lyft as “well-positioned to extend rider growth momentum” through 2019.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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