Today’s Market ActionMajor Indexes Pull Back as Investors Eye Fed Decision
The U.S. stock market retreated on Tuesday, May 6, 2025, as investors remained cautious ahead of the Federal Reserve’s policy meeting and continued to assess the impact of President Trump’s tariff policies. The S&P 500 fell approximately 0.5%, while the Dow Jones Industrial Average dropped about 0.4%. The tech-heavy Nasdaq Composite led the decline, falling around 0.6%.
Today’s pullback follows Monday’s session where the S&P 500 snapped its historic nine-day winning streak—its longest since 2004. Market sentiment shifted after President Trump’s weekend comments dimmed hopes for tariff relief, including plans to impose a 100% tariff on movies produced outside the U.S. and indications that he has no plans to discuss trade with Chinese President Xi Jinping this week.
Fed Meeting Takes Center Stage Amid Economic Uncertainty
The Federal Reserve began its two-day policy meeting today, with the rate decision expected tomorrow afternoon. While the central bank is widely anticipated to keep interest rates unchanged at the current range of 4.25%-4.50%, investors will be closely monitoring Fed Chair Jerome Powell’s comments for insights into how the economy is holding up and how the Fed views the potential impact of tariffs on inflation and growth.
“This is a very tough spot, because you’re seeing a stagflationary shock with the tariffs,” noted Don Rissmiller, chief economist at Strategas. The Fed faces a challenging balancing act as tariffs could simultaneously put upward pressure on prices while potentially slowing economic growth—creating tension between the Fed’s dual mandate of price stability and maximum employment.
Bond futures traders currently see a roughly 56% chance of a rate cut in July, with markets pricing in three rate cuts for the remainder of 2025. However, analysts caution that the timing could shift dramatically as the economic impact of tariffs becomes clearer in the coming months.
Corporate America Grapples with Tariff Uncertainty
Several major companies have begun to quantify the potential impact of tariffs on their businesses. Ford Motor Company (F) shares dropped in early trading after the automaker suspended its full-year financial guidance and warned that President Trump’s auto tariffs would reduce its 2025 adjusted earnings by approximately $1.5 billion on a net basis.
In premarket trading, data analytics firm Palantir Technologies (PLTR) saw its stock drop 7% despite solid earnings and a revenue forecast raise, as results failed to meet Wall Street’s lofty expectations for the AI-focused company. Meanwhile, DoorDash (DASH) shares fell 5% after announcing a $3.86 billion deal to acquire UK-listed food delivery service Deliveroo.
Key Earnings Reports on Deck
Today’s earnings calendar features several high-profile companies reporting after the market close. Semiconductor giant Advanced Micro Devices (AMD) will release its quarterly results, with investors focusing on growth in its data center and AI accelerator businesses, as well as updates on its MI300 chips as the company competes with Nvidia in the AI chip race.
Server manufacturer Super Micro Computer (SMCI) is also set to report, with analysts looking for clarity on supply chain constraints, backlog fulfillment, and whether demand is outpacing production capacity in the AI server market. Electric vehicle maker Rivian Automotive (RIVN) will be closely watched for vehicle production and delivery volumes, cost control measures, and margin improvement efforts as the company faces rising competition and macroeconomic headwinds.
Options pricing suggests significant post-earnings volatility for these companies, with implied moves of approximately 8.8% for AMD, 11.25% for SMCI, and 11.59% for Rivian.
Commodities and Global Markets
In the commodities market, gold prices continued their upward trajectory, surging near $3,400 per ounce as geopolitical uncertainty boosted safe-haven demand. After briefly touching a record high of $3,444 and subsequently pulling back to around $3,200 last week, gold has reclaimed its upward momentum amid persistent inflation worries and macroeconomic instability.
Oil prices have shown some weakness, with WTI crude declining to around $57 per barrel. Market sentiment remains cautious following OPEC+’s weekend signal that production increases would continue until compliance from lagging members like Iraq and Kazakhstan was achieved.
Looking Ahead: Economic Data and Market Catalysts
Beyond the Fed’s decision tomorrow, investors will be monitoring several key economic indicators in the coming days. The Bank of England is expected to announce its rate decision on Thursday, with many analysts anticipating a 25 basis point cut to help shore up the UK economy amid concerns about the impact of U.S. tariffs on global growth.
Additionally, upcoming services PMI data will provide important signals on second-quarter growth prospects for major economies worldwide. While manufacturing data has been distorted by the front-loading of tariffs, recent flash PMI services data has generally shown concerning trends across multiple economies.
As markets navigate this period of uncertainty, investors remain focused on how central banks will balance inflation concerns with growth risks, particularly as the full impact of tariff policies begins to materialize in economic data in the weeks and months ahead.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.