On May 5, 2025, the U.S. stock market experienced a pullback as the Dow Jones Industrial Average and S&P 500 indices declined due to Trump's tariff policy.

Taiwan • Business • 05/05 18:32
On May 5, 2025, the U.S. stock market experienced a pullback as the Dow Jones Industrial Average and S&P 500 indices declined due to Trump's tariff policy.

On May 5, 2025, after nine consecutive trading days of gains, the U.S. stock market pulled back, with the Dow Jones Industrial Average falling by 0.28% and the S&P 500 Index slightly rising by 0.06%. The market was affected by President Trump's announcement of a 100% tariff on films produced overseas, escalating trade tensions. Investors are focused on the Federal Reserve's interest rate decision on May 7, which is expected to remain unchanged. The stock prices of Netflix, Warner Bros. Discovery, and Disney fell, while Skechers' stock price surged by 25% due to acquisition news.

Key Updates

05/06 15:03

The three major U.S. stock indexes dropped: Investors worry about the impact of the Fed's interest rate decisions and Trump's tariff policies.

On May 6, 2025, the three major U.S. stock market indices fell in early trading as the market was uneasy about the uncertainty surrounding the Federal Reserve's interest rate decisions and Trump's new tariff policy. The Dow Jones Industrial Average dropped 230 points, the S&P 500 fell 0.9%, and the Nasdaq declined 1.1%. Technology and automotive stocks were under pressure, with Tesla down 2.3%, TSMC ADR dropped over 3%, and Ford down 0.8% due to withdrawing its financial guidance. Evgo's stock price soared 32% after its earnings report exceeded expectations.

05/06 13:30

Top 10 Events to Watch in the U.S. Stock Market on May 6, 2025: The Impact of Trump's Tariff Policy and Market Dynamics Ahead of the Federal Reserve Meeting

On May 6, 2025, the U.S. stock market fell ahead of the Federal Reserve's interest rate decision meeting, affected by President Trump's new tariff policies. Several companies released earnings reports, with some adjusting their full-year outlook due to trade uncertainties. Ford withdrew its financial guidance, estimating a tariff loss of $1.5 billion; DoorDash announced a merger, with its stock price dropping 5%; Dover announced the acquisition of Sikora; Palantir raised its revenue forecast, yet its stock price fell by 8%; Clorox lowered its sales forecast; Marriott lowered its earnings forecast. AMD and other companies released earnings reports, and U.S. consumer credit unexpectedly declined in March.

05/06 11:06

U.S. stock index futures weakened on the afternoon of May 6: Uncertainty surrounding trade negotiations and Trump's comments on tariffs caused a broad decline across the futures of the three major indices.

On May 6, 2025, U.S. stock index futures fell across the board at 4:35 PM local time in Taipei. Dow Jones Industrial Average futures dropped 243 points, S&P 500 futures fell 41 points, and Nasdaq 100 futures declined 200.25 points. The market was affected by uncertainties in U.S.-China trade negotiations, Trump's comments on tariff policies, and the Federal Reserve's interest rate decision meeting, causing investors to take a wait-and-see approach, putting pressure on the futures markets.

05/06 01:01

U.S. stocks closed down across the board: Berkshire Hathaway declined 5.12% following Buffett's announcement of retirement, TSMC ADR dropped 1.61%, and trade war tensions persist.

On May 6, 2025, major U.S. stock indices closed lower across the board, ending a multi-day rally. The market was affected by the escalation of the U.S.-China trade war, corporate earnings reports revealing tariff pressures, and Warren Buffett's announcement that he will retire at the end of the year. Berkshire Hathaway's stock dropped 5.12%, TSMC's American Depositary Receipts (ADR) fell 1.61%, and tech stocks such as Apple and Netflix also faced pressure. Although Trump indicated the possibility of reaching a partial trade agreement, the market's reaction was muted, and risk aversion sentiment heightened.

05/05 22:00

U.S. stocks fell on Monday: OPEC+ increased production, causing oil prices to plummet, with energy stocks taking the biggest hit, as Trump's trade policy and the Federal Reserve meeting drew attention.

The U.S. stock market closed lower on May 5, ending the S&P 500's nine-day streak of gains. OPEC+ announced an increase in oil production of 400,000 barrels per day starting in July, leading to a drop in oil prices and a setback for energy stocks. Trump proposed imposing a 100% tariff on foreign films, causing unease in the market. Investors are focusing on the Federal Reserve meeting on May 6 and 7, seeking guidance on interest rate policy.

05/05 18:32

On May 5, 2025, the U.S. stock market experienced a pullback as the Dow Jones Industrial Average and S&P 500 indices declined due to Trump's tariff policy.

On May 5, 2025, after nine consecutive trading days of gains, the U.S. stock market pulled back, with the Dow Jones Industrial Average falling by 0.28% and the S&P 500 Index slightly rising by 0.06%. The market was affected by President Trump's announcement of a 100% tariff on films produced overseas, escalating trade tensions. Investors are focused on the Federal Reserve's interest rate decision on May 7, which is expected to remain unchanged. The stock prices of Netflix, Warner Bros. Discovery, and Disney fell, while Skechers' stock price surged by 25% due to acquisition news.

05/05 18:00

Michael Wilson, Chief Strategist at Morgan Stanley: U.S. stocks show strong resilience, recommends investing in high-quality growth stocks and large-cap companies.

Morgan Stanley's chief strategist Mike Wilson is optimistic about U.S. stocks, despite their underperformance compared to international markets since 2015. He believes that large U.S. companies and high-quality growth stocks are resilient in a post-cycle economy, supported by the depreciating dollar, stable corporate earnings, and improvements in trade agreements with China. If the Federal Reserve adopts a dovish stance and the 10-year U.S. Treasury yield falls below 4%, it could boost the S&P 500 index. Wilson also favors healthcare and industrial stocks and has increased the target price for Tenet Healthcare to $175.

05/05 07:06

U.S. stock futures are down across the board: Dow is down more than 270 points, indicating market caution.

On the afternoon of May 5, 2025 (Taipei time), futures for the three major U.S. stock indices fell. Dow Jones Industrial Average futures fell by 277 points, S&P 500 futures fell by 38.5 points, and Nasdaq 100 futures fell by 130.75 points, reflecting the market's cautious sentiment ahead of the new week's opening. According to real-time data, as of 1:34 PM Taipei time, all three major futures indices were trending downward, indicating investors' cautious attitude towards the market environment.

05/04 23:01

European stock markets rebound strongly: Easing of the US-China trade war boosts the market, UK stocks achieve a 15-day winning streak, Airbus's performance boosts its stock price.

On May 2, 2025, European stock markets rose across the board due to signs of easing in the trade war between the US and China, with the pan-European STOXX 600 index up 1.67%. The UK's FTSE 100 index rose for the 15th consecutive day, setting a new record. Airbus announced first-quarter results which exceeded expectations, leading to a 5.3% rise in its stock price. Major stock markets in Germany, France, and other countries also saw gains, reflecting a positive market response to the improved trade conditions.

05/04 23:01

All four major U.S. stock indices rose across the board on May 1: The S&P 500 achieved its longest streak of consecutive gains since 2004, boosted by employment data and trade talks.

On May 1, 2025, the four major U.S. stock indices rose, with the S&P 500 index rising for the ninth straight trading day, marking its longest winning streak since 2004. The rally was fueled by April's non-farm employment data beating expectations and indications of renewed trade talks between the U.S. and China regarding the fentanyl issue. Non-farm payrolls increased by 177,000, while the unemployment rate held steady at 4.2%. Expectations of easing U.S.-China trade tensions bolstered market confidence, leading to a rise in the stock market.

Overview of Dow Jones and S&P 500 Index Trends

According to the closing data on May 5, Eastern Time, the Dow Jones Industrial Average fell by 114.09 points, or 0.28%, closing at 33,227.59 points. The S&P 500 Index slightly rose by 3.54 points, or 0.06%, closing at 4,528.75 points. Although the S&P 500 barely closed in the green, it had dropped nearly 0.7% intraday, indicating significant market volatility.

However, according to data updated in the Asian session, as of 9 PM Taipei time on the 5th, the Dow Jones Index further declined by 189.06 points or 0.46%, temporarily reporting at 33,128.37 points; the S&P 500 Index fell by 44.52 points or 0.78%, temporarily reporting at 4,642.15 points. This indicates that the market continues to be under pressure in after-hours trading.

Sources of Market Pressure: Trade Policy and Federal Reserve Decisions

On May 5, U.S. President Trump announced on his Truth Social platform that a 100% tariff would be imposed on all films shot and produced overseas, claiming this move is to protect the domestic film industry. This news immediately sparked concerns about escalating trade wars, leading to a broad decline in the three major U.S. stock indices in early trading.

Netflix's stock price dropped over 3.9%, Warner Bros. Discovery fell by 1.2%, and Disney slightly decreased by 0.2%. These companies, heavily involved in overseas production, became the focus of market sell-offs.

Additionally, the market is closely watching the Federal Reserve's interest rate decision, set to be announced on May 7 (Eastern Time). According to the CME FedWatch Tool, the market currently expects a 96.8% probability that the Federal Reserve will keep rates unchanged at this meeting. Nonetheless, investors are paying attention to Federal Reserve Chairman Powell's comments on the economic outlook, especially against the backdrop of increased trade policy uncertainty.

Performance of Component Stocks and Industries

Among the 30 Dow components, performance was mixed. Companies heavily exposed to international markets, such as Boeing and Disney, were under pressure due to trade policy impacts. In the tech sector, Microsoft and Apple performed relatively steadily, partly supported by last week's strong earnings reports.

In the S&P 500 Index, energy and industrial stocks generally declined, reflecting market concerns about slowing global economic growth. The Philadelphia Semiconductor Index fell by 16 points or 0.38%, closing at 4,235.62 points, indicating that the tech hardware sector is also facing pressure. TSMC ADR fell by 0.56%, closing at $178.27 per share.

Trading Volume and Market Momentum

Despite the index pullback, overall market trading volume remained relatively high, indicating that investors are keeping a close eye on market dynamics. According to Yahoo Finance, Skechers' stock price surged by 25% after announcing it would be acquired by 3G Capital for approximately $63 per share, making it one of the biggest gainers of the day. This news also led to a short-term strengthening of some consumer stocks.

Technical Observations and Market Sentiment

The S&P 500 Index achieved nine straight days of gains on May 3, the longest rally since 2004. The index rose by 1.47% that day, successfully recovering all losses since Trump's announcement of "reciprocal tariffs" on April 2. However, the pullback on May 5 indicates that the market still has doubts about short-term policy and economic prospects.

According to reports from The Wall Street Journal and Bloomberg, although China has expressed openness to trade negotiations with the U.S., no specific agreements have been reached yet. This has dampened market optimism about the trade situation.

Other Market Indicators

  • The 10-year U.S. Treasury yield rose to 4.326%, reflecting market expectations for the Federal Reserve to maintain high interest rates.
  • West Texas Intermediate (WTI) crude oil fell by 1.54%, reporting at $57.39 per barrel; Brent crude oil fell by 1.34%, reporting at $60.47 per barrel.
  • Gold prices rose by 2.57% to $3,226.60 per ounce, indicating increased demand for safe-haven assets.
  • The dollar index fell to 99.305, a recent low, reflecting market concerns about the U.S. economic and policy outlook.

References

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