U.S. stocks slipped on Tuesday as investors digested renewed tariff threats from President Trump and awaited guidance from the Federal Reserve. The central bank kicked off its two-day policy meeting, with markets largely pricing in a pause on rate changes but bracing for any shift in tone from Chair Jerome Powell amid global economic uncertainty.
By early afternoon, the S&P 500 (GSPC) had dropped 0.57%, while the Dow Jones Industrial Average (DJI) lost 0.70%. The Nasdaq Composite (IXIC) also slid 0.66%, weighed down by underperforming tech stocks and concerns over trade policy and its ripple effects on corporate earnings.
Market Movers:
- Tesla (TSLA) -2%: Shares dropped after disappointing European sales figures. Registrations in key markets like the UK and Germany fell sharply year-over-year, stoking concerns about waning demand and the company’s polarizing political affiliations amid Elon Musk’s increasing alignment with the Trump administration.
- Palantir (PLTR) -13.5%: Despite beating earnings expectations and raising its 2025 revenue outlook, Palantir shares tumbled as investors balked at the company’s valuation. Analysts flagged the stock’s high multiple as “irrational,” pointing to softening international demand and a steep run-up in recent months.
- Ford (F) +0.3%: Ford clawed back early losses after releasing a solid earnings report that was overshadowed by tariff fears. The automaker pulled its 2025 guidance, citing a potential $1.5 billion hit from looming auto tariffs, but maintained investor confidence with stronger-than-expected Q1 performance.
- Mattel (MAT) -1.7%: The toy maker withdrew its forward guidance and warned of price hikes across some of its product lines. Tariff-related cost pressures are hitting margins, with management acknowledging broader uncertainty tied to Trump’s new trade threats.
- Super Micro (SMCI), AMD (AMD), Rivian (RIVN): These companies are on deck to report earnings after the bell. Investor focus will be on demand trends in semiconductors and electric vehicles, especially given the heightened sensitivity to tariffs and supply chain shifts.
Fed in Focus
The Federal Reserve began its highly anticipated meeting on Tuesday, with analysts expecting interest rates to remain unchanged. However, traders are laser-focused on the Fed’s forward guidance, particularly whether Chair Jerome Powell will comment on the economic risks posed by Trump's escalating trade rhetoric. With inflation cooling but growth still teetering on the edge, any signal of a pivot or prolonged pause could sway sentiment heading into the summer.
Tariff Worries Reignite
Markets are increasingly on edge over former President Trump’s aggressive trade stance. After suggesting 100% tariffs on foreign-made movies and hinting at pharmaceutical duties, Trump doubled down on his protectionist platform. The fresh threats mark a reversal in expectations for tariff relief and have already begun to cloud corporate outlooks, prompting several companies to revise guidance. The long-term economic impact remains unclear, but the immediate effect has been renewed volatility and investor skittishness.
Oil Rebounds as Shale Decline Looms
Oil prices surged nearly 4% after touching multi-year lows on Monday, buoyed by concerns over declining U.S. shale production. Diamondback CEO Travis Stice signaled that U.S. output may have peaked, echoing warnings across the energy sector. West Texas Intermediate rose to just under $60 per barrel, while Brent crude climbed back to $63. However, the rebound remains fragile as the threat of weaker global demand due to tariffs continues to cap gains.
Looking Ahead
With the Fed’s decision due Wednesday, markets are likely to remain choppy as investors search for clues on future monetary policy. At the same time, trade policy remains an unpredictable wild card—one that could weigh heavily on consumer prices, earnings, and overall sentiment in the weeks to come. If Powell adopts a cautious tone and Trump ramps up tariff talk, expect more volatility ahead as Wall Street attempts to parse the economic crosscurrents.