U.S. stocks fell on Tuesday as investors anxiously awaited the Federal Reserve’s upcoming decision on interest rates. The Dow Jones Industrial Average lost 389.83 points, or 0.95%, to close at 40,829.00. The S&P 500 shed 0.77% and settled at 5,606.91, and the Nasdaq Composite dipped 0.87% to end at 17,689.66.
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All three major averages posted back-to-back declines. The Federal Reserve began its two-day policy meeting on Tuesday, with a decision scheduled for Wednesday. The central bank is expected to keep rates steady, with only a 3.1% chance of easing.
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Traders will be listening for Fed Chair Jerome Powell’s comments on his economic outlook.
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Stocks wavered after President Trump met with Canadian Prime Minister Mark Carney on Tuesday afternoon, marking the start of negotiations between the two leaders since Carney assumed office earlier this year. Trump walked back on promises that trade deals are on the horizon, saying, “We don’t have to sign deals,” contradicting Treasury Secretary Scott Bessent’s comments earlier this week.
Bessent had stated on Monday that “we’re very close to some deals,” echoing Trump’s own comments from Sunday that agreements could come soon. Official trade deals between the U.S. and its trading partners have yet to be announced. Data issued on Monday from the Institute for Supply Management showed stronger-than-anticipated service sector activity in April, but concerns around tariffs persisted.
Ford shed 1.8% after the company’s new car sales in Britain and Germany fell to their lowest in more than two years in April, even though demand for electric vehicles grew. Shares of the automaker pulled the Dow lower.
Stocks drop on Fed anticipation
Tech giants also declined. JPMorgan downgraded shares of fast-casual salad chain Sweetgreen to a neutral rating from overweight in a Tuesday note. Analyst Rahul Krotthapalli accompanied the move by lowering his price target to $25 from $32.
Shares of Sweetgreen have declined 39% this year. Krotthapalli pointed to a waning macroeconomic background that could put a strain on consumer demand. This, combined with excess restaurant supply, means that consumers are “spoilt for choice” with too many options.
U.S. onshore oil production has likely peaked and will start to decline due to the recent plunge in crude prices, Diamondback CEO Travis Stice told shareholders in a letter. U.S. crude oil prices rose more than 3% on Tuesday to $59.26 per barrel, after closing at the lowest level in four years on Monday as OPEC+ surges production. Prices are down about 17% this year due to the tariffs weighing on demand expectations while more supply is coming to market.
President Trump said Tuesday he has not yet met with Chinese officials to discuss a potential trade agreement. “They want to negotiate, and they want to have a meeting, and we will meet with them at the right time,” he said. He also indicated his administration was not actually going to strike trade agreements with every individual country, saying, “we don’t have to sign deals.”
Palantir shares tumbled 13.4% after posting $884 million in quarterly revenue, while analysts had expected $863 million.
However, earnings per share came in line with Wall Street expectations at $0.13. Ford advanced 3.2% on better-than-expected first-quarter results, reversing an earlier decline. Ford reported adjusted earnings of $0.14 per share on $37.42 billion in revenue, exceeding expectations.