By Caitlin McCabe and Gunjan Banerji

American retailers are in the spotlight, with Target, Lowe's and TJX having reported earnings this morning. The top question on investors' minds: How well are they weathering the tariff storm?

Target cut its annual outlook, and flagged softer discretionary spending and a decline in consumer confidence, while Lowe's held its guidance unchanged. TJX also maintained its outlook, assuming current U.S.-China tariff levels hold. Like Walmart, the discount chain owner is benefiting from consumers hunting for deals.

Walmart warned recently that levies would force it to hike prices, while Home Depot said it plans to hold the line. On Wednesday, Target said it aims to keep price rises as small as possible.

Meanwhile, traders are monitoring the tax-and-spending bill in Washington. President Trump has ratcheted up pressure on his party to pass the legislation, which contains an extension of tax cuts and adds new ones. The bill is expected to increase budget deficits by about $3 trillion over the next decade.

Investor anxieties about that bill, combined with Moody's Ratings stripping the U.S. of its triple-A credit rating, have pushed Treasury yields higher. On Wednesday, the 30-year yield jumped above 5%, after briefly surpassing that level Monday.

In recent trading:

U.S. stocks pared losses. The Dow industrials fell more than 0.5%, weighed down by a selloff in UnitedHealth after HSBC downgraded the stock. The Nasdaq Composite edged higher.

Treasury yields rose, continuing a global bond selloff. The benchmark U.S. yield hit 4.54%, having settled Tuesday below 4.48%.

Bitcoin climbed to a new all-time high for the first time since January.

Bloomberg suffered an outage that disrupted some European bond auctions. The company later said terminal functionality had been restored.

The WSJ Dollar Index weakened, on pace for a third day of declines.

Japan's Nikkei 225 underperformed other Asian indexes. New data showed Japan's exports to the U.S. dropped in April, reflecting weaker demand for cars and machinery including chip-making machines.

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(END) Dow Jones Newswires

May 21, 2025 12:46 ET (16:46 GMT)

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