Stocks finished sharply lower Tuesday, as investors backed away from riskier markets amid renewed trade war concern while they eyed the start of the Federal Reserve's two-day policy meeting in Washington.
The Dow Jones Industrial Average tumbled 389.83 points, or 0.95%, to finish the session at 40,829.00, while the S&P 500 slipped 0.77% to close at 5,606.91, and the tech-heavy Nasdaq shed 0.87% to end the day at 17,689.66.
In company news, Advanced Micro Devices (AMD) beat Wall Street’s first-quarter earnings expectations and provided a better-than-expected Q2 outlook.
The semiconductor maker reported adjusted earnings of 96 centers per share, up from 62 cents a year ago and beating consensus estimates of 94 cents per share.
Revenue totaled $7.4 billion. up from the year ago tally of $5.4 billion and coming in ahead of Wall Street’s call for $7.1 billion in sales.
"Despite the dynamic macro and regulatory environment, our first quarter results and second quarter outlook highlight the strength of our differentiated product portfolio and consistent execution positioning as well for the strong growth in 2025," Lisa Su, AMD's chair and CEO, said in a statement.
Updated at 1:20 PM EDT
Buy American
The Treasury sold around $42 billion in new 10-year notes that drew solid interest from foreign investors in the wake of last month's 'sell America' slump.
The sale drew overall bids worth around $109.2 billion, generating a demand ratio of 2.6, with indirect bidders (which are largely comprised of foreign central bank buyers) taking down 71.1% of the sale, a tally that was largely in-line with the average of the past six auctions.
Benchmark 10-year notes were last trading at 4.316%, down 4 basis points on the session and down 2 basis points from just prior to the auction results.
Updated at 10:24 AM EDT
Bessent optimistic
Treasury Secretary Scott Bessent told lawmakers that the U.S. is negotiating with around 17 different countries on trade deals, but has not yet engaged with China on comprehensive talks.
“I would think that perhaps as early as this week, we will be announcing trade deals with some of our largest trading partners,” Bessent told the House Financial Services Committee in Washington.
Bessent also said he expects the Commerce Department's first quarter GDP estimate, which was pegged at -0.3%, to be revised higher, and added that he isn't seeing signs of recession in the world's biggest economy.
Updated at 9:43 AM EDT
Red again
The S&P 500 was marked 38 points, or 0.67% lower in the opening minutes of trading with the Nasdaq down 155 points, or 0.87%.
The Dow fell 270 while the mid-cap Russell 2000 fell 17 points, or 0.83%.
Stock Market Today
Stocks ended lower on Monday, with the S&P 500 snapping its nine-day winning streak, the longest in more than two decades, amid concern about the impact of President Donald Trump's trade and tariff policies on the world's biggest economy.
Stronger-than-expected first-quarter earnings for the benchmark, which have improved by a collective $12 billion since reporting began last month, have supported stocks in their solid rally over the past two weeks and helped the index reclaim most of the losses it endured since April 2, when Trump unveiled what he called his Liberation Day tariffs.
However, Ford Motor (F) yesterday warned of a $1.5 billion hit to profits and pulled its full-year guidance, and a host of other companies have issued caveats to their near-term outlooks. These warnings have prompted investors to worry whether second-quarter profit-growth estimates will remain valid.
Federal Reserve Chairman Jerome Powell and his colleagues will begin their two-day policy meeting later today in Washington.Anna Moneymaker/Getty Images
Trump is also threatening new levies on the pharmaceutical sector, which has stocks such as Eli Lilly (LLY) and Pfizer (PFE) trading lower in the premarket. And despite some fulsome comments from Treasury Secretary Scott Bessent yesterday in Los Angeles, there is little evidence of an emerging trade deal with China over the coming weeks.
Investors are also paring bets on near-term support from the Federal Reserve, which will unveil its latest policy decision Wednesday in Washington, because the job market remains resilient and price pressures in the broader services economy have accelerated.
"Traders appear to be taking profits and moving to the sidelines ahead of the Federal Reserve meeting, which kicks off today," said David Morrison, senior market analyst at Trade Nation.
"Overall, US stock indices are pulling back from last week’s highs. Traders look to be using the bounce since last month’s tariff tantrum as an opportunity to reduce their market exposure," he added. "The question now is whether the indices consolidate at lower levels before another push higher, or if we can expect any rallies to be used as selling opportunities."
A weaker stock-market opening expected
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 are priced for an opening bell decline of around 32 points, with the Dow Jones Industrial Average called 200 points to the downside.
The tech-focused Nasdaq, meanwhile, is called 166 points lower with Tesla (TSLA) Palantir (PLTR) and Nvidia (NVDA) active in premarket trading.
Benchmark 10-year Treasury note yields were holding at 4.356% ahead of a $42 billion auction in new paper later this afternoon, while 2-year notes were pegged at 3.822%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, slipped 0.09% and was last marked at 99.744.
In overseas markets, Germany's DAX performance index fell 1% after lawmakers failed to vote approval for Friedrich Merz as the country's new chancellor. That's the first time since World War II that the parliament failed to approve a new chancellor. The regional Stoxx 600 benchmark slipped 0.57%.
Overnight in Asia, markets in Japan remained closed for the annual run of May holidays, while the MSCI ex-Japan index slipped 0.06% into the close of trading.
