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.

Market Sentiment Turns Cautious, Major Indices Fall Across the Board

On the eve of the Federal Reserve's two-day policy meeting, investors generally adopted a wait-and-see attitude. According to reports, the market widely expects the Fed to keep interest rates unchanged, but there is still uncertainty about future rate cuts. Additionally, the recent possibility of the Trump administration imposing new tariffs on goods such as pharmaceuticals has further heightened market concerns about an escalation in the trade war.

As of the morning of May 6th Eastern Time, the Dow Jones Industrial Average fell 300.42 points to 40,918.41, a decrease of 0.73%; the Nasdaq Composite Index fell 194.17 points to 17,650.07, a decrease of 1.09%; the S&P 500 Index fell 46.92 points to 5,603.46, a decrease of 0.83%. The PHLX Semiconductor Index also fell 1.47% to 4,291.94.

Tesla and TSMC ADR Lead Decline in Tech Stocks

Tech stocks have become the hardest hit in this round of declines. Tesla, Inc. (TSLA) shares fell 2.3% to $280.26, mainly due to weak sales in the European market. According to data, Tesla's sales in the UK in April fell 62% year-on-year, hitting a two-year low. Although the company still plans to launch a self-driving taxi service in June, the market remains concerned about the demand outlook for its core electric vehicle business.

TSMC American Depositary Receipt (ADR) also fell 2.31% to $172.32. As a key player in the global semiconductor supply chain, TSMC's stock performance was dragged down by the decline in the PHLX Semiconductor Index, which fell 64.23 points, a decrease of 1.47%.

Ford Withdraws Financial Forecast, Tariff Impact Emerges

Ford Motor Company (Ford) has become a representative victim of trade policy uncertainty. The company announced the withdrawal of its full-year 2025 financial forecast and estimated that new tariffs would reduce annual profits by $1.5 billion. Ford had initially forecasted 2025 Earnings Before Interest and Taxes (EBIT) of $7 billion to $8.5 billion in February, without accounting for tariff impacts. After the announcement, Ford's stock fell 0.8% in early trading.

According to reports, Ford is not the only company adjusting expectations due to tariff uncertainty. Several companies, including Stellantis N.V., Ferrari N.V., United Airlines Holdings, Inc., and Logitech International S.A., have also withdrawn financial forecasts or warned of potential risks, indicating that trade policy has become a significant variable in business operations.

Palantir's Earnings Miss Expectations, Stock Plummets

Despite reporting a 39% year-over-year increase in last quarter's revenue and providing a strong financial forecast, data analytics company Palantir Technologies Inc. (PLTR) failed to meet the market's high expectations, causing its stock to plummet 13.5% in early trading. As one of the popular growth stocks in the S&P 500 Index, its stock performance is indicative of overall market sentiment.

Evgo's Impressive Earnings, Stock Soars Against the Trend

In stark contrast to the general market decline, electric vehicle charging network company Evgo Inc. (EVGO) saw its stock surge 32%. The company reported first-quarter 2025 revenue of $75.3 million, a 36% year-over-year increase, exceeding the market expectation of $71.2 million. The company also reaffirmed its full-year revenue outlook of $340 million to $380 million and estimated adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) between -$5 million and $10 million. The market's positive reaction to its growth potential drove the stock significantly higher.

International and Macroeconomic Background Intensifies Market Volatility

In addition to corporate earnings and policy uncertainty, macroeconomic data also pressured the market. The U.S. trade deficit in March widened to $140.5 billion, a record high, indicating dual pressures of weak external demand and rising import costs.

Furthermore, reports from the EU suggest that if trade negotiations with the U.S. break down, counter-tariffs could be imposed on approximately €100 billion worth of U.S. goods, further deepening market concerns about supply chain and corporate profit outlooks.

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.

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