Today’s Midday Market Update: Stocks Retreat as Tariff Concerns Resurface Ahead of Fed Meeting

Major Indexes Pull Back After Historic Winning Streak

As of midday Monday, May 5, 2025, U.S. stock markets are retreating from their recent gains, with the major indexes moving lower after an impressive winning streak. The S&P 500 is down 0.4% at 5,667.52, snapping a nine-day winning streak that was the longest since November 2004. The tech-heavy Nasdaq Composite has fallen 0.5% to 17,888.11, while the Dow Jones Industrial Average is showing more resilience, up slightly by 0.1% at 41,364.53.

This pullback comes after markets had recovered all losses incurred since April 2, when President Trump announced retaliatory tariffs. Renewed concerns about trade tensions have emerged, with President Trump authorizing a 100% tariff on foreign-made movies, dampening investor sentiment.

Trade War Worries Resurface

Market sentiment has shifted as trade war concerns have resurfaced. Despite recent optimism about potential trade negotiations with China, President Trump indicated over the weekend that he has no plans to speak with Chinese President Xi this week. This development has cooled investor enthusiasm that had been building on reports that Beijing was open to trade talks.

The U.S. dollar is also losing ground today, reflecting the uncertainty surrounding trade policies. Oil prices have tumbled more than 2% amid expectations of a supply boost from OPEC+.

Federal Reserve Meeting in Focus

All eyes are on the Federal Reserve’s two-day policy meeting beginning tomorrow. The Fed funds futures trading points to just a 3.2% chance of a rate cut, according to the CME Group’s FedWatch tool. Investors will be closely monitoring any commentary from Fed Chair Jerome Powell on the economic outlook amid heightened uncertainty stemming from trade tensions.

The S&P Global US Manufacturing PMI has already revealed that the goods-producing sector reported subdued output performance and rising inflation due to recent changes in trade policies during April. This data will likely factor into the Fed’s deliberations.

Major Stock Movers

Skechers (SKX) is today’s standout performer, soaring nearly 25% to $61.55 after agreeing to be acquired by 3G Capital for $63 per share. The deal values the footwear company at approximately $9 billion and represents a 30% premium to Skechers’ 15-day volume-weighted average stock price.

Berkshire Hathaway (BRK.A, BRK.B) shares are down significantly, with the Class B shares falling nearly 5% to $512.98 following Warren Buffett’s weekend announcement that he will step down as CEO at year-end. The stock had climbed to a fresh record high on Friday before the announcement.

Tyson Foods (TSN) is among the biggest losers, dropping over 9% ahead of its quarterly earnings report scheduled for release before the market opens today.

Other notable movers include BioCryst Pharmaceuticals (BCRX), up more than 13%, and MARA Holdings (MARA), down nearly 12%.

Upcoming Earnings and Economic Data

This week features a busy earnings calendar with several major companies reporting. Today’s notable reports include Cummins (CMI), Ares Management (ARES), BioNTech (BNTX), Zimmer Biomet (ZBH), and ON Semiconductor (ON).

Later this week, investors will be watching for earnings from high-profile companies including Palantir Technologies (PLTR), Vertex Pharmaceuticals (VRTX), and Advanced Micro Devices (AMD).

On the economic front, the ISM Services PMI data for April will be closely watched, along with upcoming trade data from the U.S. and Canada. The Bank of England is also expected to announce its interest rate decision on Thursday, with analysts anticipating a 25 basis point cut to help shore up the UK economy.

As markets navigate this period of uncertainty, investors remain cautious about the potential impact of tariffs on inflation and economic growth, while keeping a close eye on corporate earnings for signs of resilience in the face of these challenges.