The U.S. stock market slipped on Tuesday after President Donald Trump’s comments on global trade deals dashed hopes of progress on the tariff front. The Dow Jones Industrial Average lost 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 Trump met with Canadian Prime Minister Mark Carney, marking the start of negotiations between the two leaders since Carney assumed office earlier this year. Trump walked back on promises that trade deals are on the horizon, saying, “We don’t have to sign deals.” This statement contradicts Treasury Secretary Scott Bessent’s earlier comments suggesting that agreements could come as early as this week.
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 a low probability of easing. 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. JPMorgan downgraded shares of fast-casual salad chain Sweetgreen to a neutral rating from overweight, citing a waning macroeconomic background that could strain consumer demand.
Stock market declines after Trump’s remarks
Analyst Rahul Krotthapalli lowered his price target to $25 from $32, implying a potential 28% rise from current levels. The current market situation has parallels to last summer, according to Henry Allen, macro strategist at Deutsche Bank. “Looking forward, this situation has a lot of echoes of last summer,” he wrote in a note on Tuesday.
“The data deteriorated sharply, and markets were briefly in turmoil. But as it became clear a recession would be avoided, markets recovered very quickly.”
The pace of merger and acquisition activity has slowed, with the number of deals signed globally falling in April to the lowest level since February 2005. In the U.S., the pace of M&A activity weakened to its lowest level since May 2009.
Diamondback CEO Travis Stice told shareholders 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, after closing at the lowest level in four years on Monday as OPEC+ surges production. President Donald Trump said Tuesday that he has not yet met with Chinese officials to discuss a potential trade agreement.
“They want to negotiate, and they want to have a meeting, and we will meet with them at the right time,” he said. Shares of Palantir tumbled 13.4% following earnings that beat revenue expectations but met earnings per share estimates. General Motors saw a 3.2% advance on better-than-expected first-quarter results, reversing an earlier decline.
