Stock Market Today: Indexes Retreat as Tariff Concerns Resurface Ahead of Fed Meeting

by Ed Liston · May 6, 2025

The stock market pulled back on Tuesday, May 6, 2025, as investors grappled with renewed trade tensions and awaited the Federal Reserve’s upcoming policy decision. Major indexes continued their downward trend after Monday’s session snapped historic winning streaks for both the Dow Jones Industrial Average and S&P 500.

Major Market Indexes Show Caution

As of midday trading, futures on the Dow Jones Industrial Average (YM=F) were down approximately 0.2%, while S&P 500 futures (ES=F) declined 0.4%. The tech-heavy Nasdaq Composite futures (NQ=F) showed the steepest drop, falling 0.6%.

This pullback follows Monday’s session where the S&P 500 ended its longest winning streak in over 20 years, declining nearly 0.7%. The Dow Jones Industrial Average similarly retreated, dropping about 0.3% after nine consecutive days of gains.

European markets showed more resilience, with the pan-European Stoxx Europe 600 index trading 0.1% higher in early trading as investors assessed corporate earnings and shifting U.S. trade policies.

Tariff Concerns Weigh on Market Sentiment

President Trump’s recent trade comments have significantly impacted market sentiment. On Monday, the President made two statements that drove the shift in market direction: first, announcing plans to impose a 100% tariff on movies produced outside the United States, and second, indicating he has no immediate plans to discuss trade with Chinese President Xi Jinping this week.

These developments have created uncertainty in various sectors, with several major companies adjusting their financial outlooks. Ford Motor Co. (F) suspended its full-year financial guidance after Monday’s market close, citing an expected $1.5 billion reduction in 2025 adjusted earnings due to auto tariffs. The company estimates a total tariff impact of approximately $2.5 billion, with plans to offset about $1 billion through strategic measures.

All Eyes on the Federal Reserve

The Federal Reserve’s two-day policy meeting begins today, with the decision announcement expected on Wednesday. While the central bank is widely expected to maintain the current federal funds rate in the 4.25%-4.50% range, investors will be closely monitoring Fed Chair Jerome Powell’s press conference for clues about future monetary policy.

According to the CME Group’s FedWatch tool, the likelihood of a rate cut at this meeting is extremely low at just 1.8%. However, the probability increases to around 30% for the June meeting, suggesting that the Fed might be preparing for potential easing in the near future.

Market analysts expect Powell to emphasize that the committee is “well positioned to wait for greater clarity before making any changes to policy,” particularly given the economic uncertainties created by tariff policies.

Key Earnings Reports in Focus

Several major companies are scheduled to report quarterly earnings today, potentially moving markets in specific sectors:

### Advanced Micro Devices (AMD)
AMD’s earnings will be closely watched for insights into the AI chip race against Nvidia. Investors will focus on growth in the data center and AI accelerator businesses, as well as updates on its MI300 chips. Guidance on gaming and PC segments will also be important indicators of the company’s overall health.

### Super Micro Computer (SMCI)
This high-volatility report is expected to generate strong investor interest, particularly regarding AI server growth. Analysts will be looking for clarity on supply chain constraints, backlog fulfillment, and whether demand is outpacing production capacity.

### Rivian (RIVN)
For the electric vehicle manufacturer, market focus will center on vehicle production and delivery volumes. Cost control and margin improvement efforts will be key metrics as the company faces rising competition and macroeconomic headwinds affecting consumer discretionary spending.

Other notable companies reporting today include BP (BP), Ferrari (RACE), Celsius Holdings (CELH), and Datadog (DDOG), each providing insights into their respective sectors from energy to luxury goods and technology.

Notable Stock Movements

Several individual stocks are making significant moves today:

– Palantir Technologies (PLTR) dropped 9.2% in after-hours trading following earnings reports that failed to meet Wall Street’s high expectations.

– Berkshire Hathaway (BRK-B, BRK-A) fell approximately 5% after the company’s board approved CEO Warren Buffett’s appointment of Greg Abel as his successor starting in 2026.

– Gold prices continued their upward trajectory, rising as much as 1.6% to above $3,387 an ounce as China returned from a five-day holiday break, boosting demand despite a firmer dollar.

Market Outlook

As investors navigate this complex market environment, several factors will likely influence trading in the coming days:

1. **Fed Commentary**: Jerome Powell’s statements on Wednesday could provide crucial insights into the central bank’s thinking on inflation, economic growth, and future rate decisions.

2. **Tariff Developments**: Any new announcements or clarifications regarding trade policies could significantly impact market sentiment and sector performance.

3. **Earnings Season**: As more companies report quarterly results, their performance and guidance will offer a clearer picture of the economic landscape.

4. **Economic Data**: Upcoming economic indicators will be scrutinized for signs of inflation persistence or economic slowdown that might influence Fed policy.

For investors wondering why the market is down today, the combination of trade tensions, uncertainty ahead of the Fed meeting, and profit-taking after the recent historic rally appears to be the primary driver of the current pullback.

As always, market participants should maintain a long-term perspective while navigating these short-term fluctuations in what continues to be a challenging but opportunity-rich market environment.