Reports of new tariffs on China were taken in stride by the U.S. equity market on Tuesday, and the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) posted moderate gains.

Today's stock market

Index Percentage Change Point Change
Dow 0.71% 184.84
S&P 500 0.54% 15.51

Data source: Yahoo! Finance.

Consumer discretionary stocks led the market, with the Consumer Discretionary Select Sector SPDR ETF (NYSEMKT:XLY) adding 1.3%. Interest rates rose, with the yield on 10-year Treasurys closing above 3% and hurting rate-sensitive sectors like the real estate. The iShares U.S. Real Estate ETF (NYSEMKT:IYR) lost 0.4%. 

As for individual stocks, FedEx (NYSE:FDX) fell after missing profit forecasts, while Viking Therapeutics (NASDAQ:VKTX) shot higher on successful results in a trial for a liver disease drug. 

Stock prices and upward graphs.

Image source: Getty Images.

FedEx delivers mixed results

Shares of FedEx fell 5.5% after the company reported fiscal first-quarter earnings that were lower than expected, although it beat revenue forecasts and raised profit guidance for the year. Revenue grew 11.5% to $17.1 billion, beating the analyst consensus of $16.9 billion. Adjusted earnings per share were up 38% to $3.46, significantly below Wall Street expectations for $3.82.

FedEx said that financial results benefited from higher package volumes, increased yields, and a favorable net impact of fuel costs. The shortfall in profit came from an increase in compensation expense. FedEx accelerated wage increases for some hourly employees in response to a lower tax rate from the new tax law. It also accrued higher variable compensation for its executives because costs from a cyberattack in the period last year resulted in a more favorable profit comparison, triggering higher incentive pay. 

Looking forward, the company maintained its full-year revenue growth target at 9% and raised its adjusted EPS guidance by $0.20 to a range of $17.20 to $17.80.

FedEx expressed optimism about the strength of the U.S. economy, while warning in the conference call that uncertainty over trade tariffs could put a chill on the global market. Still, the company said that trade with China only accounted for 2% of revenue, and that success with pricing strategies and a recent decision to expand U.S. ground service to six days a week will drive profit growth above previous expectations.

Viking Therapeutics nearly doubles after reporting a successful drug trial

Viking Therapeutics stock skyrocketed 87.3% after the company reported positive results from a midstage clinical trial of a drug to reduce liver fat and low density lipoprotein (LDL) cholesterol in patients with non-alcoholic fatty liver disease (NAFLD).

The 12-week phase 2 study of Viking's VK2809 in patients with NAFLD met the primary endpoint of a statistically significant reduction of LDL cholesterol of 20% or more compared with a placebo group. The secondary endpoint of liver fat reduction was also achieved. Seventy-seven percent to 91% of the patients taking the drug achieved greater-than-30% reduction in liver fat content and the median reduction was between 57% and 60%.

Viking Therapeutics is competing with other companies to develop a treatment for non-alcoholic steatohepatitis (NASH), a serious form of NAFLD that involves inflammation of the liver, damaging liver cells and potentially leading to liver cancer or cirrhosis.

"The quantum of liver fat reduction along with LDL-lowering properties of VK2809 are potentially likely to be beneficial in patients with non-alcoholic steatohepatitis (NASH) who have a significant risk of not only liver fibrosis progression but also cardiovascular disease," said Rohit Loomba, professor of medicine at University of California at San Diego, in the press release.

Whereas further studies will be needed before the drug can be submitted for approval, investors took the unexpectedly strong results as a sign that Viking may have a leg up in a potentially lucrative market.