The S&P 500 Index ($SPX) (SPY) is down -0.74% today, while the Dow Jones Industrials Index ($DOWI) (DIA) decreased by -0.76%, and the Nasdaq 100 Index ($IUXX) (QQQ) fell -1.06%. June E-mini S&P futures (ESM25) are down -1.00%, and June E-mini Nasdaq futures (NQM25) have dropped -1.33%.

Stock indexes are moderately lower following recent comments by various U.S. companies that raised concerns about economic impacts from the trade war. Notably, Ford Motor announced late Monday that it would withdraw its full-year financial guidance due to President Trump’s tariff plans, predicting tariffs will result in a $1.5 billion reduction in 2025 adjusted earnings this year due to “industrywide supply chain disruption.”

Stocks extended their losses with today’s report indicating that March’s U.S. trade deficit reached a record -$140.5 billion, surpassing forecasts of -$137.2 billion, adversely impacting Q1 GDP.

The Federal Open Market Committee (FOMC) begins its two-day policy meeting today, expected to keep the federal funds target range unchanged at 4.25%-4.50%. Recent economic data has been better than anticipated, moderating expectations for a rate cut this week. Swap markets now anticipate three 25 basis point Fed rate cuts by year-end, down from the four previously expected a week ago.

Focus on Tariffs and Economic Indicators

Market attention this week will center on tariffs and any adjustments to U.S. trade policy. On Wednesday, post-FOMC comments from Fed Chair Powell will be scrutinized for indications concerning future Fed policy. Additionally, Thursday’s reports will include weekly initial unemployment claims, Q1 nonfarm productivity (projected at 0.7%), and anticipated Q1 unit labor costs (estimated at +5.2%).

The markets are currently pricing in only a 2% chance of a -25 basis point rate cut following the FOMC meeting that concludes on Wednesday.

Earnings Season Underway

The Q1 earnings reporting season is ongoing. According to Bloomberg Intelligence, the current market consensus anticipates Q1 year-over-year earnings growth of +6.7% for S&P 500 stocks, down from earlier expectations of +11.1% in November. To date, 78% of the 365 S&P 500 companies that have reported earnings exceeded forecasts. Projections for full-year 2025 corporate profits for the S&P 500 has been revised to +9.4%, down from +12.5% previously anticipated in January.

Mixed Overseas Markets

Overseas markets are mixed today. The Euro Stoxx 50 index fell from a one-month high, down -0.57%. Conversely, China’s Shanghai Composite rose by +1.13% to reach a one-month high, while Japan’s Nikkei 225 remains closed for a national holiday.

Interest Rates and Bonds

June 10-year T-notes (ZNM25) are up +3 ticks, with the 10-year T-note yield down slightly by -0.6 basis points to 4.343%. Today, T-notes rebounded from a one-and-a-half week low alongside a drop in yields from a recent high of 4.375%. The downturn in stocks has increased safe-haven demand for T-notes. Additionally, the widening trade deficit reported in March reflects negatively on Q1 GDP and is seen as dovish for Fed policy.

Initially, T-note prices fell due to supply pressures as the Treasury prepares to auction $42 billion of 10-year T-notes later today as part of a $125 billion quarterly refunding. Rising inflation expectations have also contributed to bearish sentiment, with the 10-year breakeven inflation rate climbing to a one-week high of 2.293%. Furthermore, European government bond yields are increasing, with the 10-year German bund yield reaching a three-week high of 2.554%.

Eurozone Economic Indicators

In Europe, the March PPI showed a decline of -1.6% month-over-month and a year-over-year increase of +1.9%, falling short of expectations. The April S&P composite PMI for the Eurozone was revised upward to 50.4 from 50.1.

Swaps predict a 96% likelihood of a -25 basis point rate cut by the ECB at their meeting on June 5.

U.S. Stock Movers

The Magnificent Seven stocks are facing pressure, negatively affecting the overall market. Tesla (TSLA) is down over -2%, following a report of a -62% year-over-year decline in UK April vehicle sales. Nvidia (NVDA) has also decreased by more than -2%, while Meta Platforms (META) is down over -1%. Alphabet (GOOGL) has fallen -0.86%, Amazon.com (AMZN) is down -0.75%, Microsoft (MSFT) decreased by -0.63%, and Apple (AAPL) is down -0.59%.

Chip stocks are also in decline, with Advanced Micro Devices (AMD) and Marvell Technology (MRVL) down more than -2%. Other chipmakers like ARM Holdings Plc (ARM), Broadcom (AVGO), KLA Corp (KLAC), Intel (INTC), Micron Technology (MU), ON Semiconductor (ON), and Texas Instruments (TXN) have all seen declines greater than -1%.

Significant Declines in Earnings Reports

Palantir Technologies (PLTR) is leading the S&P 500 losers with a drop of more than -9%, following Q1 adjusted EPS results of 13 cents that failed to meet optimistic investor expectations. Vertex Pharmaceuticals (VRTX) is down over -10% after reporting adjusted net income of $1.05 billion, below analyst consensus of $1.12 billion. DoorDash (DASH) has fallen more than -7% after reporting Q1 revenue of $3.03 billion, missing expectations of $3.10 billion, and announcing acquisitions of SevenRooms for $1.2 billion and Deliveroo for $3.9 billion.

Fabrinet (FN) is down over -5% after anticipating Q4 adjusted EPS in the range of $2.55 to $2.70, below the consensus estimate of $2.67. Clorox (CLX) is down more than -4% as well, reporting Q3 net sales of $1.67 billion, below the $1.72 billion consensus, and adjusting its full-year organic sales forecast down from +4%-7% to +4%-5%.

Datadog (DDOG) has dropped by over -3% after announcing a Q2 adjusted EPS forecast of 40 to 42 cents, which missed consensus expectations of 42 cents.

Notable Advancements

In contrast, Archer-Daniels-Midland (ADM) is up more than +3%, reporting Q1 adjusted EPS of 70 cents, which exceeded the consensus estimate of 66 cents. Marriott International (MAR) has risen over +2%, thanks to Q1 revenue of $6.26 billion, exceeding the consensus of $6.20 billion. Additionally, AngloGold Ashanti Plc (AU) gained over +3%, leading gold-mining stocks higher as COMEX gold prices are up over +2% at a two-week high. Newmont (NEM) is also up more than +1%.

Celanese (CE) is seeing a rise of more than +7% after reporting Q1 net sales of $2.39 billion, surpassing the expected $2.27 billion. Ingredion (INGR) is up over +4% following a Q1 adjusted EPS of $2.97, above the consensus of $2.41, and has raised its full-year adjusted EPS forecast to $10.90-$11.60, higher than the previous forecast range of $10.75-$11.55, and stronger than the consensus of $10.99.

Upcoming Earnings Reports

Earned Reports (5/6/2025): Advanced Micro Devices Inc (AMD), American Electric Power Co Inc (AEP), Archer-Daniels-Midland Co (ADM), Arista Networks Inc (ANET), Assurant Inc (AIZ), Ball Corp (BALL), Constellation Energy Corp (CEG), Corpay Inc (CPAY), Devon Energy Corp (DVN), DoorDash Inc (DASH), Duke Energy Corp (DUK), Electronic Arts Inc (EA), Expeditors International of Washington (EXPD), Fidelity National Information (FIS), Gartner Inc (IT), Gen Digital Inc (GEN), Global Payments Inc (GPN), International Flavors & Fragrances (IFF), IQVIA Holdings Inc (IQV), Jack Henry & Associates Inc (JKHY), Jacobs Solutions Inc (J), Leidos Holdings Inc (LDOS), Marathon Petroleum Corp (MPC), Marriott International Inc/MD (MAR), Mosaic Co/The (MOS), Super Micro Computer Inc (SMCI), TransDigm Group Inc (TDG), Waters Corp (WAT), WEC Energy Group Inc (WEC), Wynn Resorts Ltd (WYNN), Zoetis Inc (ZTS).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.