Dow drops 300 points on earnings and inflation worries; Nvidia powers Nasdaq, European stocks close lower

US stocks were mixed mid-session Tuesday as earnings disappointment in banks and sticky inflation data dragged the Dow lower, even as Nvidia’s rally lifted the Nasdaq. Global markets, meanwhile, grappled with new signs of US-China divergence in sentiment, and Europe closed lower despite tech strength.

By 2:45 p.m. ET, the Dow Jones Industrial Average had fallen 313 points, or 0.5 percent, while the S&P 500 slipped 0.1 percent. The Nasdaq Composite bucked the trend, rising 0.5 percent, supported by gains in Nvidia and AI-linked plays.

Tech resilience offsets blue-chip drag
Nvidia led the Nasdaq higher after announcing it hopes to resume shipments of its H20 GPUs to China “soon,” pending license approvals. AMD and TSMC also posted solid gains, while Micron and Broadcom rose nearly 2 percent intraday. The news lifted US-listed semiconductor stocks broadly and extended to Europe’s tech sector.

MP Materials surged over 25 percent after securing a $500 million deal to supply Apple with recycled rare earth magnets from its Texas facility. The miner’s stock has nearly doubled in a week following a Pentagon investment and renewed domestic sourcing momentum.

Earnings season stirs mixed reactions
JPMorgan ticked lower despite beating Q2 estimates, weighed down by cautionary commentary on loan demand and rates. Citigroup held modest gains, while Wells Fargo remained under pressure after trimming net interest income guidance. Newmont dropped over 8% after announcing CFO Karyn Ovelmen’s abrupt departure.

In the solar space, First Solar popped 6% as reports emerged of a US Commerce Department probe under Section 232 into drone and polysilicon imports—a move that could precede national-security-linked tariffs aimed at protecting domestic clean tech manufacturing.

Inflation steady, Trump demands deep Fed cuts
Tuesday’s CPI print showed headline inflation rose 0.3 percent MoM and 2.7 percent YoY, slightly hotter than May’s 2.4 percent, while core CPI ticked up 0.2 percent. The data was broadly in line with estimates but reignited political pressure.

President Donald Trump renewed calls for the Federal Reserve to slash interest rates, demanding a 3 percentage point cut on social media, claiming “very low inflation” and estimating $1 trillion in potential savings.

Pew Survey: Global sentiment shifts toward China
Adding a geopolitical layer to market concerns, a new Pew Research Center survey showed China’s global favourability has risen to a six-year high, while the US image has dimmed, particularly among high-income nations. Just 35 percent of respondents held a favorable view of the US — the lowest since 2017 — while 32 percent viewed China positively. Confidence in President Xi Jinping marginally overtook that in the US president, for the first time since Trump’s first term.

Analysts flagged this shift as a soft-power signal amid widening tariff tensions and competing trade narratives. The survey was conducted between January and April, overlapping Trump’s first wave of global tariff threats.

European markets close lower; Renault names interim CEO
European equities ended in the red, with the Stoxx 600 down 0.37 percent, marking a third straight day of losses. Early optimism over possible EU-US tariff negotiations faded by afternoon, as inflation data from the US and weak corporate updates weighed on sentiment.

Tech remained a rare bright spot, with the Europe tech sub-index up 0.8 percent tracking Nasdaq’s strength.

Key movers included:

Barratt Redrow, down 9.4 percent, after missing home completion targets despite announcing a £100 million buyback.

Ericsson, which slumped 7.7 percent on weak margins due to US tariffs, despite higher sales.

Renault, which named CFO Duncan Minto as interim CEO following the sudden exit of Luca de Meo. The automaker reports H1 results on July 31.

Separately, Ericsson CEO Börje Ekholm raised concerns about Europe’s “over-regulation” of AI, calling for a freeze on new rules to avoid falling behind the US and China in applied AI innovation.

The UK’s FTSE 100 briefly crossed the 9,000 mark intraday before settling lower at 8,938, down 0.66 percent.

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