The Dow Jones Industrial Average lost 389.83 points, or 0.95%, to close at 40,829.00 on Tuesday. The S&P 500 shed 0.77% to settle at 5,606.91, and the Nasdaq Composite dipped 0.87% to end at 17,689.66. All three major averages posted back-to-back declines.
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Stocks slipped after President Donald Trump’s commentary on global trade deals, diminishing hopes that progress will soon be made on the tariff front. Investors also awaited the Federal Reserve’s policy decision. General Motors shed 1.8% after the company’s new car sales in Britain and Germany fell to their lowest in more than two years in April, even though demand for electric vehicles grew.
Tech giants also declined.
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Trump walked back on promises that trade deals are on the horizon, saying, “We don’t have to sign deals.” His statement contradicts Treasury Secretary Scott Bessent’s comments earlier this week, who stated that deals could come as early as this week. The Fed began its two-day policy meeting on Tuesday, with a decision scheduled for Wednesday.
The central bank is expected to keep rates steady. Traders will be listening for Fed Chair Jerome Powell’s comments on his economic outlook. “Despite external pressure to lower rates, the Fed will likely hold strong on the current pause until we see greater clarity on the major economic factors impacting the economy,” said Steve Rick, chief economist at TruStage.
Market decline amid trade uncertainty
JPMorgan downgraded shares of fast-casual salad chain Sweetgreen to a neutral rating from overweight in a Tuesday note. Analyst Rahul Krotthapalli lowered his price target to $25 from $32, pointing out that a waning macroeconomic background could put a strain on consumer demand.
Henry Allen, macro strategist at Deutsche Bank, noted that the latest market moves resemble last summer’s situation when fears of a downturn were rife but ultimately a recession was avoided. The pace of merger and acquisition activity has slowed, according to data compiled by Dealogic and reported by Reuters. The number of deals signed globally fell in April to the lowest level since February 2005.
U.S. onshore oil production has likely peaked and will start to decline due to the recent plunge in crude prices, according to Diamondback CEO Travis Stice. U.S. crude oil prices rose more than 3% on Tuesday to $59.26 per barrel. President Donald Trump said Tuesday that he has not yet met with Chinese officials to discuss a potential trade agreement.
“They want to negotiate, and they want to have a meeting, and we will meet with them at the right time,” he said. Palantir shares tumbled 13.4% after the company posted $884 million in revenue, while analysts had penciled in $863 million. General Motors advanced 3.2% on better-than-expected first-quarter results, reversing an earlier decline.
This has been a challenging week for the markets, with trade uncertainties and Federal Reserve decisions weighing heavily on investor sentiment.
Image Credits: Photo by Nicholas Cappello on Unsplash
