Today’s Midday Market Update: Stocks Retreat as Fed Meeting Begins and Earnings Roll In

Major Indexes Pull Back After Historic Winning Streak

The major U.S. stock indexes retreated during midday trading on Tuesday, May 6, 2025, as investors digested a wave of corporate earnings reports while awaiting news on tariffs and the Federal Reserve’s two-day policy meeting that begins today.

As of 12:00 PM Eastern Time, the S&P 500 was down 0.4%, the Dow Jones Industrial Average fell 0.5% (approximately 185 points), and the tech-heavy Nasdaq Composite declined 0.7%. This pullback comes after Monday’s session snapped a historic nine-day winning streak for the S&P 500, its longest rally since 2004.

Market futures had signaled weakness from the start, with S&P 500 futures down 0.9% and Nasdaq 100 futures dropping 1.1% in pre-market trading. Investors appear to be taking a cautious approach after the recent rally that helped stocks recover from losses following President Trump’s early-April announcement of plans to impose hefty tariffs on leading trading partners.

Fed Meeting Takes Center Stage

The Federal Reserve’s May policy meeting, scheduled for May 6-7, is commanding significant market attention. While the CME Group’s FedWatch tool indicates a 99% probability that the Fed will maintain its benchmark rate at the current range of 4.25% to 4.5%, investors will be closely analyzing Fed Chair Jerome Powell’s comments for clues about future rate decisions.

Despite President Trump’s continued calls for interest rate cuts, economists generally expect the central bank to hold steady at this meeting and possibly at its June 18 meeting as well. The first potential rate cut might come at the July 30 meeting, with FedWatch currently showing an 80% probability for a reduction at that time.

Tariff Uncertainty Continues to Weigh on Markets

Trade policy remains a significant market concern. Treasury Secretary Scott Bessent told CNBC on Monday that “we’re very close to some deals,” echoing President Trump’s Sunday comments that agreements could come as early as this week. A Bloomberg report cited that India has proposed zero tariffs on certain goods, but no official trade deals between the U.S. and its trading partners have yet been announced.

The uncertainty has led some companies, including Ford, to suspend financial guidance due to tariff concerns. Currency markets have also seen significant movement, with the Taiwanese Dollar appreciating 10% in just two sessions amid speculation about a potential U.S.-Taiwan trade deal.

Earnings Season in Full Swing

Today marks one of the busiest days of the earnings season, with 991 companies scheduled to report their quarterly results. Among the notable reports:

– Advanced Micro Devices (AMD) will release Q1 2025 earnings after market close, with investors watching closely after Bill Ackman’s investment firm increased its stake in Howard Hughes Holdings (HHH).

– Palantir Technologies shares plunged 8% in pre-market trading following its earnings report, potentially forming a double top pattern.

– Ferrari NV (RACE) reported strong Q1 results with net revenues of Euro 1,791 million, up 13.0% versus the prior year, and an operating profit of Euro 542 million, up 22.7%.

– Other major companies reporting today include Progressive Corp (PGR), Arista Networks (ANET), Duke Energy (DUK), DoorDash (DASH), Marriott International (MAR), and Datadog (DDOG).

Looking Ahead

Investors should watch for the Fed’s policy announcement tomorrow afternoon, potential trade deal announcements that could come this week, and continued earnings reports from major companies. Economic data releases later this week could also provide further insights into the health of the U.S. economy, especially after the mixed signals of negative first-quarter GDP growth contrasted with strong April job numbers.

Gold prices remain elevated near $3,325 an ounce after surging almost 3% on Monday, reflecting ongoing uncertainty and a weaker dollar. This suggests investors continue to seek safe-haven assets amid the current economic and policy uncertainties.