Market Overview

The S&P 500 index decreased by 0.8%, marking its second consecutive drop following a remarkable nine-day winning streak—the longest in over two decades. The Dow Jones Industrial Average fell by 0.9%, while the Nasdaq composite also experienced a decline of 0.9%.

Corporate Earnings and Forecasts

Palantir Technologies

Palantir Technologies was a significant detractor from market performance, dropping 12%. Despite reporting earnings that met analysts’ expectations and updating its revenue forecast positively, investor confidence waned. The company’s stock, previously soaring to around $110, has drawn concerns after peaking, reflecting the challenges AI companies face in convincing investors of their growth potential.

Clorox

Clorox reported disappointing revenue and profits, attributing the results to shifts in consumer behavior during the first quarter. The CEO, Linda Rendle, indicated the company might continue to experience slowdowns, leading to a 2.4% drop in its stock price.

Mattel

In contrast, toy manufacturer Mattel announced it is “pausing” its 2025 financial forecasts due to the unpredictable nature of U.S. tariffs, impacting its market outlook. Nonetheless, the company reported better-than-expected quarterly results, leading its stock to rise by 2.8%.

Ford Motor

Ford Motor Company announced an anticipated $1.5 billion impact this year from tariffs, prompting the cancellation of its full-year financial forecast. However, its stock reversed course, gaining 2.7% amid these revelations.

Economic Impact of Tariffs

Many companies are adjusting their forecasts as uncertainties surrounding Trump’s tariff policies persist. There is growing concern that ongoing tariff negotiations could lead the economy into a recession, with households expressing increased pessimism regarding economic conditions and long-term spending plans. This uncertainty has led to a marked increase in imports as consumers and businesses prepare for potentially heightened tariffs.

The U.S. trade deficit reached an unprecedented $140.5 billion in March, a consequence of both consumer demand and business preparation for impending tariffs. In the context of overall economic performance, recent reports indicate a 0.3% annual contraction in the U.S. economy during the first quarter, primarily driven by the increase in imports.

Sector Highlights

Archer Daniels Midland, a leader in food processing, noted a 31% decline in operating profit in agricultural services due to the uncertainty around trade policies, although its stock rose by 1.7% following the announcement.

DoorDash also faced challenges, with its stock tumbling by 7.4% after reporting revenues that disappointed analysts. Despite this, the company highlighted continued solid order growth in its U.S. marketplace, consistent with growth rates over the past year.

Financial Indicators and Future Outlook

The S&P 500 concluded the day down 43.47 points, settling at 5,606.91. The Dow saw a reduction of 389.83 points to close at 40,829, while the Nasdaq fell by 154.58 points, finishing at 17,689.66.

In the bond market, Treasury yields also recorded declines, with the yield on the 10-year Treasury note falling from 4.36% to 4.31%.

The Federal Reserve began a two-day meeting, with an announcement regarding interest rates anticipated on Wednesday. Current expectations suggest no changes will be made to the main rate at this time, despite advocacy from President Trump for cuts.

Michele Raneri, vice president and head of U.S. research and consulting at TransUnion, commented, “While the possibility still exists for potential rate cuts later this year, the economic picture is complicated, and it’s too early to know if or when those cuts might happen.” Lowering interest rates could spur economic activity but might also exacerbate inflation concerns, particularly amidst worries about the impact of tariffs on pricing.

Global Markets

International markets displayed mixed results, with a 1.1% increase in Shanghai and a 0.7% rise in Hong Kong, contrasting with the difficulties faced by U.S. indexes.