The stock market faced a challenging day on Tuesday as uncertainty surrounding global trade deals weighed on investor sentiment. The Dow Jones Industrial Average dropped 389.83 points, or 0.95%, to close at 40,829.00. The S&P 500 shed 0.77% and settled at 5,606.91, while the Nasdaq Composite dipped 0.87% to end at 17,689.66.
All three major averages posted back-to-back declines. Stocks wavered after President Donald Trump met with Canadian Prime Minister Mark Carney on Tuesday afternoon. During the meeting, Trump walked back on promises that trade deals are on the horizon, contradicting earlier comments from Treasury Secretary Scott Bessent.
Bessent had suggested that agreements could come as early as this week, but official trade deals between the U.S. and its trading partners have yet to be announced. Tesla shares shed 1.8% after the company’s new car sales in Britain and Germany fell to their lowest in more than two years in April, even though demand for electric vehicles grew. This decline pulled the Dow lower.
The Federal Reserve began its two-day policy meeting on Tuesday, with a decision scheduled for Wednesday. The central bank is expected to keep rates steady, with market expectations suggesting just a 3.1% chance of easing.
Stocks fall amid trade uncertainty
Traders will be listening for Fed Chair Jerome Powell’s comments on his economic outlook. Despite external pressure to lower rates, the Fed will likely hold strong on the current pause until we see greater clarity on the major economic factors impacting the economy,” said Steve Rick, chief economist at TruStage. As the impacts of tariffs settle in, we still broadly expect the economy to shift toward a slower pace of growth than in recent months.
JPMorgan downgraded shares of fast-casual salad chain Sweetgreen to a neutral rating from overweight.
Analyst Rahul Krotthapalli lowered his price target to $25 from $32. Shares of Sweetgreen have declined 39% this year. The analyst pointed to a waning macroeconomic background and excess restaurant supply as the main catalysts for the downgrade.
Several companies made headlines in midday trading. Palantir shares tumbled 13.4%, though they posted $884 million in revenue, slightly beating analysts’ expectations. Ford advanced 3.2% on better-than-expected first-quarter results, reversing an earlier decline.
President Trump indicated that trade meetings with China will happen “at the right time,” suggesting no immediate plans to strike agreements. U.S. onshore oil production has likely peaked and will start to decline due to the recent plunge in crude prices, Diamondback CEO Travis Stice told shareholders in a letter. U.S. crude oil prices rose more than 3% on Tuesday to $59.26 per barrel.
