Wall Street Stumbles: U.S. Stocks Slide in Early Trades

Dow, S&P, and Nasdaq Open Lower on Tuesday

U.S. stocks took a nosedive in early trades on Tuesday, May 20, 2025. The S&P 500, Dow Jones Industrial Average, and Nasdaq all kicked off the day in the red.

The Dow Jones Industrial Average plummeted nearly 50 points right out of the gate, while the S&P 500 slipped by 0.3%. It was a rough start, folks!

Stocks were struggling big time in those early trades on Tuesday, hinting at a possible cooldown. The Nasdaq Composite also opened down by 0.4%. It was a lackluster trading session, especially after Wall Street's recent optimism had been pushing major indices higher. The S&P 500 had been on a roll with six straight days of gains, but it looks like that winning streak might be coming to an end.

The performance across the equities market on Tuesday was a stark contrast to investor reactions just a day earlier.

Jamie Dimon, the big boss at JPMorgan, dropped a bombshell on investors and clients during the bank's investor day. He warned that the market was dangerously complacent.

Dimon, who also mentioned that JPMorgan will now let clients buy Bitcoin (BTC), pointed out the geopolitical and macroeconomic risks that people seem to be ignoring. He said, "The market came down 10%, [it's] back up 10%. That's an extraordinary amount of complacency."

Dimon's comments came right as the credit ratings firm Moody's downgraded the U.S. But even with that downgrade, most market experts are still feeling pretty bullish.

Wells Fargo, for example, is telling investors to load up on American and other developed markets' stocks while cutting back on emerging markets. They believe that emerging market stocks just don't have the same long-term potential as the big and mid-cap shares from the U.S. and other developed markets.

The firm also thinks that commodities and some fixed income assets are better bets for investors looking to play it safe.

WELLS FARGO: BUY U.S. STOCKS, AVOID EMERGING MARKETS

Wells Fargo is advising investors to ditch their emerging market (EM) stock holdings, even with recent gains. They're pointing to weak long-term performance and structural risks like political instability and China's economic issues.

In the midst of all this, Home Depot shares managed to inch up a bit, despite the home improvement giant posting some mixed earnings. Revenue was up 9.4% year-over-year, hitting $39.86 billion, but net earnings per share took a 4.95% hit, dropping to $3.45, which was below the consensus expectation of $3.59. Still, the surge in the company's stock helped the Dow stay slightly in the green.

U.S. Treasury yields were still pretty high, though they did pull back a bit from the previous session's levels. The 30-year Treasury yield was hovering around 4.961%, down from Monday's jump past 5%. The 10-year yield was at 4.493%, and the 2-year Treasury yield was sitting at 3.987%.

Over in the crypto world, things were looking up as BTC was trading near $105k, up 2.2% in the past 24 hours. Ethereum (ETH) was hanging around $2.5k among the altcoins. Meanwhile, gold was up 0.15% at $3,237.