Stock Market Today: Dow Falls on Caterpillar Slump, Rising Geopolitical Tensions

By Yasin Ebrahim

Investing.com -- The Dow fell Tuesday, weighed down by rising geopolitical tensions and a slip in Caterpillar on weaker-than-expected revenue.

The Dow Jones Industrial Average fell 1.2%, or 402 points, the Nasdaq was down 0.16%, and the S&P 500 fell 0.66%.

Geopolitical tensions ratcheted up a notch intraday after Chinese battery giant CATL reportedly said it would pause plans to invest billions of dollars in a new U.S. battery plant because of House Speaker Nancy Pelosi’s trip to Taiwan.

The House Speaker arrived in Taiwan despite Beijing warning of retaliation over the visit.

As well as geopolitical tensions, a surge in Treasury yields also soured investor sentiment following remarks from Fed members playing down the prospect of the Fed pausing or cutting rates next year.

Cleveland Fed President Loretta J. Mester said it would “take a while to get inflation back to that 2 percent,” and shrugged off worries about the slowing economy, stressing that a slowdown is “necessary.”

The comments arrived just hours after San Francisco Fed President Mary Daly said the Fed’s job to bring inflation down was “far from done.”

Tech swung between positive and negative, pressured by rising U.S. Treasury yields as investors mull the falling prospect of a less hawkish Fed.

Losses in consumer stocks were kept in check by a climb in Tesla and a jump in cruise stocks.

Tesla (NASDAQ:TSLA) cut losses to close around 1% higher - adding to its more than 30% gain seen in July - ahead of the electric automaker’s shareholder meeting on Thursday. The meeting, which will include a vote on the company’s 3-for-1 stock split proposal, will also be closely watched for any updates on Cybertruck, Tesla’s all-electric pickup truck.

Healthcare stocks were helped by a rally in Intuitive Surgical (NASDAQ:ISRG), DexCom (NASDAQ:DXCM) and Zimmer Biomet Holdings (NYSE:ZBH), with the latter up more than 3% after the medical device company raised its outlook on revenue following better-than-expected quarterly results.

Energy stocks, meanwhile, ended slightly lower as oil prices struggled to sustain momentum amid uncertainty about whether major oil producers will decide to lift production at a meeting on Wednesday.

Commerzbank said that while the outcome of the OPEC+ meeting is “impossible to predict...there is more to suggest that the current production volume will be left unchanged, which should help prices to stabilize.”

Caterpillar (NYSE:CAT), meanwhile, reported a miss on revenue as the impact of its exit from Russia, higher costs and a stronger dollar weighed on performance. Its shares fell more than 5%.

Uber Technologies (NYSE:UBER), meanwhile, reported its maiden positive cash flow and a revenue that topped expectations offsetting a wider than expected loss to send the share price up more than 18%.

Pinterest (NYSE:PINS) jumped more than 11% despite quarterly results falling short of Wall Street estimates as activist investor Elliott Management confirmed that it had become the company’s largest shareholder as it looks to forward to helping the company realize its “full potential."

In other news, Cowen Group (NASDAQ:COWN) climbed 8% after the financial services firm reportedly agreed to be acquired by TD Bank for $1.3 billion.