The Dow lost 200 points as Boeing stock came under pressure again on concerns about 737 Max jet production delays. The S&P 500 fell 0.6%, led by losses in industrials, energy and financial companies. The Nasdaq Composite dropped 0.5% as Microsoft, Apple, Amazon and Alphabet all declined.
Market focus is centered on corporate earnings results, with major U.S. banks set to kick off the first-quarter earnings season later in the week. J.P. Morgan Chase and Wells Fargo are both poised to report their latest figures on Friday, while Citigroup and BlackRock are scheduled to publish their results next week.
Bank of America, which will also report earnings next week, said Tuesday that it’s raising its minimum wage for its employees to $20 an hour. The minimum wage at the company will be raised to $17 effective May 1 and will increase in increments over the next two years.
Bank of America, Goldman Sachs, J.P. Morgan and Morgan Stanley all fell at least 0.5%.
Investors anticipate first-quarter S&P 500 earnings growth to slip 4.3% on a year-over-year basis, according to FactSet estimates. S&P 500 revenues are expected to grow just under 5%.
“We’re heading into earnings seasons and growth is expected to be negative for the first time since 2016. I think investors are wringing their hands over it,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors. “But, if you look at all the credit spreads, you look at volatility, everything still suggests that investors just tighten their seatbelts.”
“That said,” Ablin added, “it appears we’ve had a year’s worth of gains in the first three months so I can’t blame anyone for wanting to take chips off the table.”
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Wall Street short seller Carson Block believes the crashes show that the company is more concerned with short-term profits than anything else.
The prolonged grounding of the 737 Max planes forced American Airlines on Tuesday to lower its revenues guidance for the first fiscal quarter. The airline cut its total expected revenue per seat mile, a key industry measure of performance, to a range of flat to 1%, down from a prior estimate of flat to 2%.
Though American Airlines stock fell 1.1% Tuesday, selling in major industrials names wasn’t confined to the aerospace industry.
But Brussels on Tuesday responded to the prospective U.S. levies by saying it’s ready to respond in kind.
“The EU is confident that the level of countermeasures on which the notice is based is greatly exaggerated. The amount of WTO authorized retaliation can only be determined by the WTO-appointed arbitrator,” a European Commission spokesman said.
Shares of Caterpillar fell 1.8% while Deere dropped 3.1%.
Disney, meanwhile, rose 1.4% Tuesday after brokerage Cowen upgraded the Dow component and told clients that its film pipeline should boost profits over the next few years.
“We view Disney’s catalyst path for the next year as highly attractive, and believe Thursday’s investor day will likely be a deck-clearing event for sentiment,” wrote Cowen analyst Doug Creutz.
—CNBC’s Sam Meredith, Spriha Srivastava and Eustance Huang contributed to this story.