Full Market Coverage HereMajor Indexes Pull Back as Investors Eye Fed Meeting
As of midday Monday, May 5, 2025, major U.S. stock indexes have retreated from their recent highs, breaking a remarkable nine-day winning streak that had been the longest since 2004. The S&P 500 is down 0.4%, the tech-heavy Nasdaq Composite has fallen 0.6%, while the Dow Jones Industrial Average is hovering near unchanged territory.
This pullback comes after a strong rally that had enabled the S&P 500 to recoup all losses incurred since President Trump’s “Liberation Day” tariff announcements in early April. Market sentiment had been buoyed by generally strong quarterly results from major companies and optimism that the Trump administration might soften its stance on tariffs.
Fed Meeting Takes Center Stage This Week
Investors are now turning their attention to the Federal Reserve’s two-day policy meeting beginning tomorrow. According to the CME Group’s FedWatch tool, there is only a 1.8% likelihood of a rate cut at this meeting, suggesting the federal funds rate will likely remain in the current range between 4.25% and 4.50%.
However, market participants will be closely monitoring Federal Reserve Chairman Jerome Powell’s press conference following the meeting for any hints about potential rate cuts in June, which currently has around a 30% probability according to market estimates.
The 10-year Treasury yield remained steady at 4.32% in morning trading, while the 2-year Treasury yield dropped slightly to 3.801%, indicating some market expectation of eventual easing in monetary policy.
Notable Stock Movements
Several major stocks are making significant moves today:
– Meta Platforms (META) shares jumped 4.3% as tech stocks generally performed well in early trading.
– Apple (AAPL) shares slid 3.7% after the iPhone maker announced it would trim its share buyback program by $10 billion.
– Take-Two Interactive Software (TTWO) plunged 6.7% after pushing back the release of its highly anticipated “Grand Theft Auto VI” to May 2026.
– JPMorgan Chase (JPM) gained 2.3%, leading financials to become one of the day’s best-performing sectors.
– Berkshire Hathaway shares were down about 3% following Warren Buffett’s announcements at the company’s annual meeting over the weekend.
Trade Optimism Remains a Market Driver
Recent market gains have been partially fueled by increasing hopes for a U.S. trade deal with major trading partners. Chinese authorities have indicated they’re evaluating the possibility of starting trade negotiations with the U.S., and a report by The Wall Street Journal suggested that Beijing is open to trade talks.
However, some market analysts remain cautious. Ryan Dykmans, chief investment officer at Dunham & Associates Investment Counsel, noted: “We do see this run up as being more based on excitement than actual, solid — not just fundamentals, but an actual change.”
Economic Data and Upcoming Events
Investors will be watching several key economic indicators this week:
– PMI data for the services sector from both S&P Global and ISM are expected later today
– Import and export data will be released later in the week
– Weekly initial jobless claims reports will provide further insight into the labor market
These reports follow Friday’s jobs data, which showed that seasonally adjusted nonfarm payrolls rose by 177,000 in April, exceeding the expected 133,000.
Looking Ahead
As we move further into the trading day, investors will be balancing recent positive earnings reports against concerns about trade tensions and monetary policy. The Federal Reserve’s commentary on Wednesday will likely set the tone for market direction in the coming weeks, particularly regarding the timing of potential interest rate cuts that could impact both borrowers and investors across the economy.