(Bloomberg) — Wall Street’s risk-off mode prevailed in the countdown to the Federal Reserve decision, with stocks falling as disappointing corporate and economic signals fueled concern about the repercussions of President Donald Trump’s trade war.
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The buying wave that had powered equities from the brink of a bear market lost steam with investors awaiting more meaningful breakthroughs in negotiations between the US and its top trading partners. The S&P 500 fell about 1%. Ford Motor Co. suspended its guidance and said auto tariffs will take a toll on profit. Palantir Technologies Inc. sank as its results failed to live up to the loftiest expectations. data showing the trade deficit widened to a record in March, although stale, didn’t help sentiment either.
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Goldman Sachs Group Inc. strategists say current stock valuations leave little room for the recent rally to continue. That’s after the S&P 500 on Monday halted its longest winning streak in about 20 years. JPMorgan Chase & Co. strategists, meanwhile, say US assets are “not a good place to hide.”
“Fading upside in a complacent equity market amid continued trade uncertainty, and huge downside economic risks which have yet to be adequately discounted,” said Michael Brown at Pepperstone. “I also remain a dip buyer in gold, and a rally seller in the dollar.”
In the bond market, shorter maturities outperformed longer ones ahead of Wednesday’s Fed announcement. While Trump has been ratcheting up pressure on the central bank to resume cutting rates, officials have mostly emphasized a need to wait and see how trade policies implemented last month affect the economy.
The administration’s tariff agenda also has stoked fears about foreign demand for US assets including Treasuries, with implications for an auction of new 10-year notes at 1 p.m. New York time.
The S&P 500 fell 0.9%. The Nasdaq 100 slid 1.4%. The Dow Jones Industrial Average dropped 0.8%. The yield on 10-year Treasuries rose one basis point to 4.36%. The Bloomberg Dollar Spot Index slipped 0.1%.
Corporate Highlights:
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Two chipmakers reporting earnings in the coming days will give investors insight into how demand for artificial intelligence infrastructure is holding up a few weeks ahead of Nvidia Corp.’s results. Advanced Micro Devices Inc. is set to report results Tuesday after market close while Arm Holdings Plc will give its earnings figures postmarket on Wednesday.
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Hims & Hers Health Inc. reiterated its 2025 revenue forecast after posting better-than-expected sales for the first quarter, raising questions about the future as it shifts from making copycat weight-loss drugs to selling discounted versions of Novo Nordisk A/S’s blockbuster Wegovy.
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Archer-Daniels-Midland Co.’s earnings shrunk to the lowest level since the pandemic as a difficult crop trading market is complicated by mounting trade and biofuel policy uncertainty.
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Marriott International Inc. lowered its estimates for a key measure of revenue growth, joining the ranks of hotel companies adjusting expectations for an uncertain economic moment.
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DoorDash Inc. is buying hospitality tech company SevenRooms Inc. for $1.2 billion, hours after confirming its plans to acquire London-based delivery Deliveroo Plc, underscoring its appetite for aggressive global expansion.
