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.

Taiwan • Business • 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.

Key Updates

05/06 21:30

Small investors increase their investments in Berkshire despite the trend; Buffett's announcement to step down has not shaken confidence.

On May 5, 2025, Berkshire Hathaway's stock price fell by more than 5%, marking the third-largest single-day drop in the past five years. Nevertheless, small investors saw a net inflow of $24.4 million into Berkshire's Class B shares that day, setting the highest single-day record since 2016. This phenomenon occurred following Buffett's announcement that he would step down as CEO at the end of the year, with Greg Abel succeeding him, indicating that small investors' long-term confidence in Berkshire was not affected.

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.

OPEC+ Announces Production Increase, Oil Prices Plummet

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced after their May 3 meeting that they will increase production by more than 400,000 barrels of crude oil per day starting in July, similar to the increase in May. The decision, led by Saudi Arabia and Russia, aims to penalize member countries such as Kazakhstan and Iraq that have not adhered to quotas. This move marks OPEC+'s gradual rollback of the production cuts implemented since 2022 to support oil prices.

The market reacted sharply. On May 5th, Brent crude oil futures for July fell by as much as 4.5% during trading, dropping to $58.5 per barrel, breaking the $60 threshold; West Texas Intermediate (WTI) crude oil futures for June also fell by 5.15%, to $55.30 per barrel. Although the decline narrowed later, both major oil benchmarks still fell by more than 2%.

According to The New York Times, OPEC+'s decision to increase production is not only a demonstration of internal discipline but may also be related to geopolitical considerations. Saudi Arabia and the United Arab Emirates are believed to be seeking favor with U.S. President Trump in exchange for concessions in defense and artificial intelligence cooperation.

Energy Stocks Lead Decline, Major U.S. Indices Close Lower

U.S. energy stocks fell sharply on Monday due to the plunge in oil prices. The Energy Select Sector SPDR Fund (XLE), an exchange-traded fund, fell 1.3%. Among individual stocks, Exxon Mobil (XOM) and Chevron (CVX) fell 1.9% and 1.7%, respectively; APA Corporation (APA), ONEOK (OKE), and Occidental Petroleum (OXY) fell about 3%.

In the broader market, the S&P 500 index fell 36.29 points, or 0.64%, to close at 5,650.38 points, ending a nine-day winning streak. The Dow Jones Industrial Average fell 98.6 points, or 0.24%, to close at 41,218.83 points. The Nasdaq Composite fell 133.49 points, or 0.74%, to close at 17,844.24 points. The Philadelphia Semiconductor Index and the NYSE FANG+ Index also fell by 0.93% and 0.72%, respectively.

Among the 11 major sectors of the S&P, energy stocks fell the most, down 2.02%; only the consumer staples sector saw a slight increase of 0.02%.

Trump's Trade Policy Stirs Up Waves Again

Market sentiment was also affected by recent trade policies from U.S. President Trump. On Sunday, Trump announced plans to impose a 100% tariff on foreign-made films and instructed the Commerce Department and Trade Representative to initiate related studies. This move is seen as part of his "reciprocal tariff" policy, continuing the high tariffs imposed on goods from multiple countries on April 2.

According to Yahoo Finance, Trump's tariff policies have put pressure on the global economy, leading many companies to lower sales expectations and triggering layoffs and reduced investments. Economists generally believe these policies pose a "demand shock" to global demand, further suppressing growth momentum in the energy and manufacturing sectors.

Additionally, Trump stated that he has no plans to meet with Chinese President Xi Jinping this week, dampening market expectations for progress in U.S.-China trade negotiations.

Federal Reserve Meeting Approaches, Market Awaits

Investors are also turning their attention to the upcoming Federal Open Market Committee (FOMC) meeting scheduled for May 6-7. This will be the Federal Reserve's third policy meeting of 2025, and the market widely expects the Fed to maintain the current federal funds rate range of 4.25% to 4.50%.

According to CBS News, Federal Reserve Chairman Powell will hold a press conference after the meeting to explain policy decisions and future outlook. Although recent U.S. economic data shows resilience in service sector activity, inflationary pressures and trade uncertainties continue to pose challenges for decision-making.

Market participants are generally cautious, waiting to see if the Fed will signal further easing or maintain the status quo.

References

People Also Ask...

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What impact does OPEC+'s increase in production have on efforts to combat climate change? Is this kind of policy going to make it harder for us to hit our carbon emission reduction goals?

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After OPEC+ boosted production, oil prices took a nosedive. Why did energy stocks drop so sharply?

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After OPEC+ boosted production, oil prices dropped significantly. How does this affect energy stocks and investments?