S&P 500 Index Set to End 9-Day Rally Amid New Tariffs and Ahead of Rate Decisions

Barry Adams
05 May, 2025
New York City

Wall Street indexes declined in Monday's trading after the U.S. president unleashed another wave of tariffs. 

The S&P 500 index fell 0.6%, and the Nasdaq Composite declined 0.7% amid fresh worries of another change in the U.S. trade policy. 

Movie studio operators and streaming service providers led the decliners after Donald Trump announced 100% tariffs on foreign-made movies. 

Investors turned cautious on Monday after benchmark indexes erased most of the tariff-driven losses over the last four weeks. 

Last week, Wall Street indexes rebounded for the second consecutive week and erased April’s losses as investors reacted positively to quarterly results from leading tech and industrial companies.

Investors reviewed a flood of economic reports, including job market and GDP growth updates, and despite the tariff uncertainties, the U.S. job market expanded at a healthy pace, soothing the nerves of investors.

However, April’s increase in payrolls is likely to be revised sharply lower next month because the surveys were conducted in the second week of the month, and businesses still had not experienced the full brunt of the Trump administration’s tariff flip-flops.

 

Week Ahead 

In the week ahead, investors are looking ahead to interest rate decisions from the Federal Reserve and the release of international trade data.

The U.S. Federal Reserve is expected to hold steady its key fed funds rate range between 4.25% and 4.5%, despite the growing pressure from the White House to lower rates at the upcoming meeting. 

The Bank of England is widely expected to cut rates by 25 basis points to 4.25% on Thursday, and investors are anticipating two additional rate cuts totaling 50 basis points in the remainder of the year. 

On the earnings front, investors anticipate results from Berkshire Hathaway, Marriott International, Costco Wholesale, Uber Technologies, Arm Holdings, Shopify, Walt Disney, ConocoPhillips, and Ford Motor Company.

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index decreased 0.7% to 5,646.96, the Nasdaq Composite edged down 0.7% to 17,850.61, and the Russell 2000 index was down 0.9% to 2,002.72.

The yield on 2-year Treasury notes edged lower to 3.82%, 10-year Treasury notes increased to 4.32%, and 30-year Treasury bonds advanced to 4.83%.

WTI crude oil decreased $0.96 to $57.33 a barrel, and natural gas prices edged higher by $0.01 to $3.64 a thermal unit.

Gold increased by $78.95 to $3,318.31 an ounce, and silver edged up by $0.54 to $32.54.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.54 to 99.49, and it traded at the lowest level since April 2022.

 

U.S. Stock Movers 

Movie studios were under pressure after the U.S. president proposed a levy of 100% on movies made outside of the United States. 

Warner Brothers Discovery declined 3.6% to $8.23, Walt Disney Company decreased 3.5% to $89.38, and Fox Corp. eased 0.4% to $49.27. 

Howard Hughes Holdings jumped 7.5% to $72.50, and Bill Ackman-controlled Pershing Square acquired an additional stake in the company for $900 million. 

The company will sell 9 million newly issued shares to Pershing Square, and the purchase price is a 48% premium over Friday's close. 

After the latest infusion, Pershing Square's economic stake in the company will increase to 46.9% and voting stake to 40%.

In addition, Howard Hughes will pay Pershing Square a quarterly base fee of $3.75 million and a quarterly management fee that reflects changes in its market capitalization.