Dow Jones Drops 350 Points Amid Merck and Amgen Slumps

The Dow Jones Industrial Average lost about 350 points, with pharmaceutical firms Merck and biotech company Amgen contributing to the decline. The drop came after Federal Reserve Chair Jerome Powell signaled that interest rates could be lowered next month. The decline was attributed to concerns that Powell's assertion that tariffs would be a one-time increase in prices may not play out as expected.

The U.S. stock market retreated on Monday, with the Dow Jones Industrial Average (^DJI) dropping more than 350 points, or about 0.7%, after closing Friday at its first record high of 2025. The S&P 500 (^GSPC) fell 0.3%, and the tech-heavy Nasdaq Composite (^IXIC) trimmed session gains to close down 0.1% [1].

The decline was attributed to several factors, including concerns over Federal Reserve Chair Jerome Powell's comments that interest rates could be lowered next month. Powell's assertion that tariffs would be a one-time increase in prices may not play out as expected, adding to investor uncertainty [1].

Pharmaceutical firms Merck and biotech company Amgen contributed to the decline, with Merck reporting a notable beat on earnings per share (EPS) but seeing its stock fall in pre-market trading [2]. Merck's EPS of $2.13 surpassed the forecast of $2.03, marking a 4.93% surprise, but revenue fell short of expectations at $15.81 billion, slightly below the forecast of $15.87 billion [2]. Despite the EPS beat, Merck's stock saw a 2.75% drop, influenced by the revenue miss and broader market volatility [2].

Looking ahead, the spotlight turns to Nvidia (NVDA), the most valuable stock in the S&P 500, which reports earnings after the closing bell on Wednesday. Analysts see the chipmaker posting earnings of $1.01 per share on $46.13 billion in revenue. Price targets have been climbing in the lead-up, reflecting optimism that demand for AI hardware remains high. Nvidia stock has already had a monster run: Shares are sitting near a record high, up 32% year to date, while nearly doubling since April’s market low [1].

Wednesday’s report acts as a litmus test for Nvidia as well as the broader market, as investors eyed a potential rotation out of tech before the end-of-week rally. Meanwhile, Dell (DELL) and Marvell Technology (MRVL) report on Thursday [1].

The market will also be closely watching the July PCE inflation report, the Fed's preferred inflation gauge, scheduled for release on Friday. Economists expect core PCE to rise 2.9% year over year [1].

References:
[1] https://finance.yahoo.com/news/live/stock-market-today-dow-slides-from-record-sp-500-nasdaq-fall-with-nvidia-earnings-looming-200049241.html
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-merck-q2-2025-results-beat-eps-forecast-stock-dips-93CH-4203951