Financial Markets                      05/06 09:31

   

   NEW YORK (AP) -- U.S. stocks are sinking Tuesday as AI mania on Wall Street 
loses more steam and as more companies scrub their forecasts for upcoming 
profits because of uncertainty created by President Donald Trump's tariffs.

   The S&P 500 was down 1.1% in early trading and on track for a second drop 
after breaking a nine-day winning streak, its longest such run in more than 20 
years. The Dow Jones Industrial Average was down 438 points, or 1.1%, as of 
9:55 a.m. Eastern time, and the Nasdaq composite was 1.4% lower.

   Palantir Technologies was one of the heaviest weights on the market after 
falling 13.5%. The company, which offers an AI platform for customers, dropped 
even though it reported a profit for the latest quarter that met analysts' 
expectations and raised its forecast for revenue over the full year.

   AI-related companies have been finding it more difficult recently to 
convince investors to support their stocks after they've already shot so high. 
Palantir's stock's price remains near $110, when it was sitting at only $20 
less than a year ago.

   The only other stock to weigh more heavily on the S&P 500 was Nvidia, the 
chip company that's become the poster child of the artificial-intelligence 
frenzy. It fell 2.4%.

   The return to Earth for AI stocks is happening as Trump's tariffs change the 
economic landscape for other companies.

   Clorox CEO Linda Rendle said her company saw changes in shopping behavior 
during the first three months of the year, for example, that led to lower 
revenue. The company reported both weaker revenue and profit for the latest 
quarter than analysts expected. Clorox expects the slowdowns to continue in the 
current quarter, and its stock fell 5.3%.

   Toymaker Mattel, meanwhile, was swinging between losses and gains after it 
said it's "pausing" its financial forecasts for 2025, in part because the 
"evolving U.S. tariff landscape" is making it difficult to predict how much 
U.S. shoppers will spend over the holiday season and the rest of this year.

   It was most recently up 0.4%. It also reported better results for the latest 
quarter than analysts feared.

   Ford Motor said it's expecting to take a $1.5 billion hit to its operations 
this year because of tariffs. It said it's also cancelling financial forecasts 
for the full year because of "tariff-related uncertainty."

   They're the latest companies to join a lengthening list that have yanked 
their financial forecasts for the year given uncertainty about what Trump's 
on-again, off-again rollout of tariffs will do to the economy. The hope is that 
Trump will relent on some of his tariffs after reaching trade deals with other 
countries. Without them, many investors expect the economy to fall into a 
recession.

   Regardless, all the will-he-won't-he uncertainty around tariffs has already 
made U.S. households more pessimistic about the economy and could affect their 
long-term plans for purchases. Some companies say they're already seeing 
impacts to their business from the uncertainty created by tariffs.

   DoorDash fell 8.5% after reporting weaker revenue than analysts expected for 
the latest quarter, though it may have also offered a more encouraging snapshot 
of how U.S. households are doing. The company said order growth in its U.S. 
marketplace remained healthy and consistent with average growth over the last 
year.

   Treasury yields were edging lower in the bond market. The yield on the 
10-year Treasury slipped to 4.35% from 4.36% late Monday.

   The Federal Reserve is beginning a two-day meeting, and it will announce its 
next move on interest rates Wednesday. Virtually no one expects it to do 
anything to its main rate, even though Trump has been advocating for cuts.

   Lower interest rates could help goose the economy, but they could also give 
inflation more fuel. And worries are already simmering that Trump's tariffs 
could push inflation higher.

   Markets were mixed across Europe and Asia. Indexes rose 1.1% in Shanghai and 
0.7% in Hong Kong.

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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