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The Dow slid nearly 400 points and the S&P 500 posted back-to-back losses on Tuesday as uncertainty around trade deals weighed on markets. Investors also awaited the Federal Reserve’s policy decision, which is scheduled for Wednesday. President Donald Trump’s comments on global trade deals dashed hopes of imminent progress on the tariff front.
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During a meeting with Canadian Prime Minister Mark Carney, Trump walked back on promises of impending trade deals, stating, “We don’t have to sign deals.” This contradicted earlier comments from Treasury Secretary Scott Bessent, who had said the U.S. was “very close to some deals.”
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Tesla shares fell 1.8% after the company’s new car sales in Britain and Germany dropped to their lowest levels in over two years in April, despite growing demand for electric vehicles. Tech giants also declined, contributing to the overall market slide. The Federal Reserve began its two-day policy meeting on Tuesday, with a decision expected on Wednesday.
The central bank is widely anticipated to keep rates steady, with only a 3.1% chance of easing. Traders will closely monitor Fed Chair Jerome Powell’s comments on the economic outlook. JPMorgan downgraded shares of fast-casual salad chain Sweetgreen to a neutral rating from overweight, citing weakening consumer demand and excess restaurant supply as key concerns.
Trade uncertainty impacts market performance
The price target was lowered to $25 from $32, with Sweetgreen shares having declined 39% this year. Henry Allen, macro strategist at Deutsche Bank, believes that the latest market moves echo last summer’s fears of a U.S. downturn, which prompted market turmoil.
However, he suggests that tighter financial conditions resulting from tariffs are unlikely, lessening the chances of a significant market correction or an economic recession. Tariff uncertainty has also put a damper on dealmaking, with April seeing the lowest level of global merger and acquisition activity since February 2005. The value of the transactions was about 20% below the monthly average.
In the oil sector, Diamondback CEO Travis Stice suggested that U.S. onshore oil production has likely peaked and will start to decline due to the recent plunge in crude prices. U.S. crude oil prices rose more than 3% on Tuesday to $59.26 per barrel, but prices remain down about 17% this year. President Trump indicated that trade meetings with Chinese officials would occur “at the right time” but suggested that the administration does not plan to strike trade agreements with every individual country.
As stocks continued to make significant moves midday, Ford advanced 3.2% on better-than-expected first-quarter results, while shares of Palantir tumbled 13.4% as its revenue narrowly beat analyst estimates, but earnings per share came in line with expectations.
