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.
Key Updates
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.
U.S. Stock Indices Close Lower Across the Board
On Monday (5th), all three major U.S. stock indices closed lower, ending the S&P 500's nine-day winning streak. The Dow Jones Industrial Average fell 98.60 points, or 0.24%, to close at 31,218.83 points; the S&P 500 dropped 36.29 points, or 0.64%, to 5,650.38 points; and the Nasdaq Composite Index declined 133.49 points, or 0.74%, to 17,844.24 points. The PHLX Semiconductor Index also fell 0.93%, closing at 4,356.18 points.
The market generally believes that uncertainty surrounding the trade war and the upcoming Federal Open Market Committee (FOMC) interest rate decision prompted investors to take profits, leading to selling pressure at the close.
TSMC ADR and Tech Stocks Under Pressure
In the semiconductor and tech sectors, TSMC's ADR fell 1.61%, closing at $176.40, reflecting market concerns over rising supply chain costs and slowing demand in the Chinese market. In the local Taiwanese market, TSMC's stock also fell 1.3%, closing at NT$938.
Other tech giants also performed weakly. Apple's stock fell over 3%, mainly due to potential market share loss in China and rising manufacturing costs. Netflix dropped 3.5% after Trump announced a 100% tariff on foreign-produced films. Tesla and Amazon also fell more than 2% each.
Buffett Announces Retirement, Berkshire Stock Plummets
Another market-shaking news came from "Oracle of Omaha" Warren Buffett. He announced at the Berkshire Hathaway annual shareholders meeting that he will step down as CEO by the end of 2025, with current Vice Chairman Greg Abel set to succeed him. Despite the successor being long determined, Buffett's formal announcement still triggered a strong market reaction.
Berkshire's Class B shares (BRK.B) closed down 5.12% on Monday, at $312.15, wiping out about $59.0 billion in market value. Analysts pointed out that although Abel has extensive experience, Buffett's long-standing market trust and investment acumen are hard to replace, causing investors to have doubts about Berkshire's future strategic direction.
Trade War Continues to Impact Corporate Profits
Escalating U.S.-China trade tensions continue to significantly impact business operations. According to multiple corporate earnings reports and management statements, tariffs have led to increased costs and supply chain disruptions. For example, Apple faces approximately $900 million in additional costs due to increased tariffs; Harley-Davidson estimates an additional $130 million to $175 million in annual spending due to tariffs; Newell Brands stated it has raised product prices to cope with tariff pressures.
Additionally, Trump's recent announcement of a 100% tariff on foreign-produced films has further heightened concerns over retaliatory tariffs and global trade tensions. Stocks of media companies like Netflix, Disney, and Warner Bros. have all been affected and declined.
Trump's Agreement Possibility Met with Tepid Market Reaction
Despite Trump stating in an interview with the media that the U.S. might reach trade agreements with some countries this week and hinting at the possibility of reducing tariffs on China at some point, the market reaction was relatively cautious. He also emphasized that there are currently no plans to speak with Chinese President Xi Jinping and reiterated that any agreement must be "fair."
China, on the other hand, expressed willingness to negotiate on tariffs but demanded that the U.S. show sincerity and remove unilateral tariffs. The two sides still have significant differences, and the market remains skeptical about the possibility of reaching a substantial agreement in the short term.
