Stocks Fall on Tariff Concerns as the FOMC Meeting Begins
The world of finance is buzzing with activity as U.S. stocks open lower today amid growing concerns over trade tariffs. President Trump’s plan to impose further tariffs has sent shockwaves through the market, dampening investor sentiment. Adding to the mix is the Federal Reserve’s two-day meeting, which kicks off today ahead of tomorrow’s rate decision.
Trump’s Tariff Announcements
- On Monday, President Trump hinted at announcing farmer tariffs within the next two weeks.
- This announcement follows his recent decision to impose tariffs on foreign-made movies.
The uncertainty surrounding tariffs is causing consumers, businesses, and even the Federal Reserve to adopt a cautious “wait-and-see” approach to understand the economic outlook. Despite Trump’s reassurances of progress in potential trade deals, investors remain on edge due to the lack of concrete results.
As the Fed begins its two-day meeting, all eyes are on the central bank’s interest rate decision. With stable job data, the Fed is likely to maintain the status quo for now. However, the market is already pricing in the possibility of a rate cut in July, with expectations of multiple cuts by the end of the year.
Corporate News
Let’s take a closer look at some key developments in the corporate world:
Planatir Technologies
- Despite posting earnings and revenue in line with analysts’ estimates, Planatir Technologies is facing an 8% decline.
- The defence technology company also raised its full-year revenue guidance.
- However, challenges in Europe, slowing customer growth rates, and trade tensions are contributing to the stock’s decline.
Ford
- Ford shares are down over 2% after the company suspended its 2025 guidance.
- This decision was made due to near-term risks associated with supply chain disruptions.
- Despite this setback, Ford’s Q1 earnings and revenue exceeded expectations.
DoorDash
- DoorDash is experiencing a 3% decline after its Q1 revenue missed estimates.
- However, the company’s adjusted earnings surpassed expectations.
- DoorDash has also sealed a deal worth $2.9 billion for Deliveroo.
S&P 500 Forecast – Technical Analysis
Turning our attention to the S&P 500, let’s delve into some technical analysis:
The S&P 500’s recovery faced resistance at 5700 before retracing lower. Currently, the price is testing support at 5600. Immediate support levels are seen at 5550-5500 and 5400 below. To regain momentum, buyers need to surpass the 5700 level and target the 200 SMA at 5760.
FX Markets – USD Falls, GBP/USD Rises
Shifting gears to the foreign exchange markets, here’s a snapshot of the latest movements:
The USD is weakening as investors eagerly await news on trade deals. The lack of significant developments is heightening investor nervousness. Last week’s optimism is waning, with all eyes now on the upcoming FOMC decision. Any indication of a delay in rate cuts could potentially boost the USD.
Meanwhile, the GBP is on the rise, capitalizing on a weaker USD. Despite a slowdown in business activity in the eurozone, the GBP is gaining ground. Germany’s Merz also failed to secure enough votes to become Chancellor, setting the stage for a second vote soon.
Lastly, the GBP is climbing despite the contraction in the UK service sector. Although input costs are rising, the GBP remains resilient. All eyes are on the Bank of England’s upcoming decision, with expectations of a rate cut.
Oil Sees A Technical Rebound From A 4-Year Low
Lastly, let’s take a look at the oil market:
Oil prices are rebounding after hitting a four-year low, despite concerns of oversupply following OPEC’s decision to increase output. The recent rebound is seen as a technical recovery, with WTI still below the key $60.00 level.
In the past six sessions, oil prices have dropped over 10%, triggered by Trump’s tariff announcements. The market remains cautious amid ongoing supply concerns.