US stocks fell last Tuesday as the Federal Reserve kicked off its two-day policy meeting. Investors are closely monitoring how the meeting might influence the Fed’s stance on interest rates and the broader economic outlook. The benchmark S&P 500 slid about 0.8%, while the Dow Jones Industrial Average dropped nearly 1%, or almost 400 points. The tech-heavy Nasdaq Composite also fell 0.9%.
The Fed’s rate decision countdown is on Wednesday as policymakers begin their two-day meeting. Although the central bank is not expected to make any immediate changes, Wall Street will listen closely to Chair Jerome Powell’s comments on how the economy is holding up, especially in light of recent trade tensions. The focus is on the Fed’s evaluation of the fallout from former President Trump’s trade policies, which have yet to show up in economic data fully.
Over the weekend, Trump’s remarks dimmed hopes of tariff relief, unsettling investors. Treasury Secretary Scott Bessent announced that some trade deals, particularly with the UK, were moving closer to finalization. Meanwhile, Trump met with Canadian Prime Minister Mark Carney at the White House.
Ford shares climbed back from earlier losses in the market as investors digested its earnings, which were muddied by tariff uncertainties. Barbie maker Mattel withdrew its guidance amid similar uncertainties, and Trump hinted at new tariffs on pharmaceutical imports, impacting stocks like Eli Lilly.
Fed meeting weighs on investors
Chipmaker AMD, server maker Super Micro, and electric vehicle company Rivian were among the highlights on Tuesday’s earnings docket. Disney’s earnings report is due before the bell on Wednesday, and it will focus on updates on its parks and streaming businesses. Comcast revealed the name for its spin-off company, previously referred to as SpinCo.
The new company, Versant, will include most of NBCUniversal’s cable television networks. However, Comcast will maintain ownership of its NBC broadcast network, including NBC News, and its Peacock streaming service. Philips’ stock slid more than 4% as tariff concerns overshadowed a moderate first-quarter earnings report.
Tesla also faced challenges, with shares falling 2% due to demand weakness in Europe amid a Model Y changeover and CEO Elon Musk’s polarizing role in the Trump administration. Diamondback Energy CEO Travis Stice predicted that US shale production has peaked and will likely decline as oil prices hover near four-year lows. Both West Texas Intermediate and Brent crude futures rebounded on Tuesday, with prices edging up after touching their lowest points in four years.
Treasury Secretary Scott Bessent suggested that new trade deals with major partners could be announced as soon as this week. Bessent stated that the US is currently renegotiating deals with 17 of its 18 key trading partners, with China as the exception. Investors will continue to watch developments closely as the Fed’s rate decision and ongoing trade negotiations unfold.
