Shares of Boeing and Caterpillar – two companies with high foreign sales – each fell by more than 1 percent. The chip makers also retreated as Nvidia, Intel and Advanced Micro Devices fell by more than 0.5 percent.
"Despite industry headlines, S & P 500 companies should make robust profits, with disproportionate revenue growth and significantly higher margins," said Dubravko Lakos. Bujas, head of US equity strategy at JP Morgan, noted on Wednesday
"While weaker overseas growth, the stronger USD and trading risks require some caution, the consensus is in the face of rising disposable income (ie tax savings and expanding labor market) and lower budgetary expenditure (eg decreasing costs of goods / services including services) ", said Lakos-Bujas. "In addition, revenue growth should benefit from the expanding labor market, increased business investment, rising government spending, and higher oil prices."
According to FactSet, corporate earnings in the second quarter are likely to have increased by 20 percent. The earnings season started this week with PepsiCo, which posted better-than-expected earnings on Tuesday. JP Morgan Chase, Citigroup and Wells Fargo will be announced this week.
"The sharp market reaction to the Trump government's announcement last night … shows how sensitive the markets are to tariff news," said Jeffrey Kleintop, chief global investment strategist at Charles Schwab. Kleintop added that the second quarter results "might give some insight into whether tariffs have an actual impact on" hard "data and not on sentiment in surveys and markets, so far we have not seen any significant impact." [1
Trump is currently in Brussels to attend a two-day NATO summit. During the first leg of his trip to Europe, the US incumbent has already made headlines: "Germany is completely controlled by Russia," and describes how a series of "inadequate" oil and gas agreements have given Moscow too much influence over Berlin.  The stock of pharmaceutical companies also fell after Pfizer announced after a talk with the president to postpone the price increases. Pfizer fell 0.4 percent before the bell, Biogen fell 1.4 percent. Merck also lost 0.5 percent.
-CNBC's Sam Meredith contributed to this report