US stocks were mixed Monday as renewed tariff threats from former President Trump and anticipation of the Federal Reserve’s upcoming policy meeting caused investors to hit pause on a historic market rally.
The S&P 500 slipped roughly 0.3%, ending its nine-day winning streak, while the Nasdaq Composite fell 0.5%, led lower by tech. The Dow Jones Industrial Average managed a small gain of 0.2% after recovering from early-session losses. The dollar also lost ground, while oil continued to slide on rising supply concerns.
Market Movers:
- Tesla (TSLA): The stock fell over 3% following disappointing sales data out of Spain, where new registrations dropped 36% in April. The decline adds to growing concerns that CEO Elon Musk’s political involvement and shifting brand perception are impacting demand in key European markets.
- Berkshire Hathaway (BRK-B): The stock dropped 3% after Warren Buffett confirmed he will step down as CEO by year-end. Investors appeared rattled despite a solid earnings report, signaling worries about a future without the Oracle of Omaha at the helm.
- Ford (F): Shares were flat ahead of its earnings report, which isdue later this week. Investors are watching closely to see how the automaker is handling Trump’s new auto part tariffs, which could pressure margins if supply chain costs rise.
- Palantir (PLTR): Shares edged slightly higher as investors anticipate strong earnings from the data analytics firm. With AI enthusiasm still elevated, analysts expect solid guidance to drive near-term gains.
- Disney (DIS): Disney hovered near unchanged ahead of its report, with Wall Street focusing on streaming profitability and park performance amid lingering economic uncertainty and geopolitical volatility.
Trade Fears Resurface
Hope surrounding a thaw in US-China relations took a hit over the weekend when Trump declared he had no plans to speak with Chinese President Xi Jinping this week. He also threatened a 100% tariff on foreign-made films, part of a broader push to ramp up protectionist measures, including auto parts tariffs that went into effect Friday.
While Chinese officials signaled an openness to renewed talks, the lack of a clear negotiation timeline has revived memories of past trade war volatility. For investors, that means recalculating the risks of global supply chain disruption and potential retaliation from Beijing.
Oil Plunges as OPEC Opens the Taps
Crude prices sank more than 2% on Monday as OPEC+ members signaled increased output next month. West Texas Intermediate dipped to around $57 per barrel, with Brent crude hovering near $60. The drop follows April’s worst monthly performance for oil since 2021 and reflects growing fears that Trump’s tariffs could slow global demand.
Adding to the pressure, Saudi Arabia appears willing to endure lower prices to gain market share, a strategy that could deepen the supply glut. Goldman Sachs cut its oil forecast for both 2025 and 2026, citing high recession risk and ample spare capacity.
A Split View on Services Data
Economic readings on the US services sector delivered a mixed picture Monday. The ISM Services Index rose to 51.6 in April, its strongest level since January 2023, with pricing concerns tied to actual tariff impacts. However, the S&P Global Services PMI dipped to 50.8, its lowest since November, pointing to weakening business confidence and slower hiring.
This divergence highlights the uncertainty clouding the broader economy: while some segments show resilience, others appear to be stalling under geopolitical strain and budget cuts.
Looking Ahead
Investors are now focusing on the Federal Reserve’s two-day policy meeting, which begins Tuesday. While the Fed is expected to hold rates steady, Trump’s renewed push for rate cuts,paired with unclear inflationary impacts from tariffs, adds a layer of complexity. Earnings from several marquee companies, including AMD and Disney, are also on deck and could provide direction in a week marked by uncertainty.
Will markets regain their footing—or is this the start of a longer pullback? Much will depend on the Fed’s tone and whether trade tensions continue to escalate.