S&P 500 Closes at 5,606.91, Dow at 40,829 as Tariffs and Fed Meeting Drive U.S. Market Decline

U.S. stocks declined for a second consecutive day as investors weighed ongoing trade uncertainty and awaited the Federal Reserve's monetary policy decision. On Tuesday, the S&P 500 closed at 5,606.91, down 0.8%, the Dow Jones Industrial Average dropped 0.9% to 40,829, and the Nasdaq Composite finished 0.9% lower at 17,689.66. The S&P 500's nine-day winning streak, its longest in over 20 years, ended with a 0.6% decline on Monday. Market sentiment was dampened by President Donald Trump's announcement of new tariffs, including a planned 100% tariff on foreign-produced movies and forthcoming tariffs on pharmaceuticals. The uncertainty surrounding the timing and scope of potential trade agreements, despite comments from Treasury Secretary Scott Bessent that the U.S. is 'very close to some deals,' contributed to the cautious mood. Trump met with Canadian Prime Minister Mark Carney, but no specific trade decisions were announced. The Federal Reserve began its two-day policy meeting on Tuesday, with the decision on interest rates expected Wednesday. Futures markets are pricing in only a 2.7% chance of a rate cut, and the Fed is widely expected to hold rates steady. Investors are closely monitoring Chair Jerome Powell's comments for signals on future policy amid concerns that tariffs could further fuel inflation and slow economic growth. Several companies reported changes in their outlooks due to tariff uncertainty. Ford withdrew its 2025 guidance and warned of a $1.5 billion impact from auto tariffs. Mattel also paused its 2025 guidance, citing the evolving U.S. tariff landscape. Palantir Technologies shares fell 12% after earnings, with management highlighting international headwinds that could intensify with tariffs. The U.S. trade deficit reached a record $140.5 billion in March, as businesses and consumers accelerated imports ahead of new tariffs. Globally, market participants remain focused on the potential for trade deals between the U.S. and major partners, with no concrete agreements yet announced. European and Asian markets showed mixed performance, while the U.S. bond market saw Treasury yields move lower. Investors are awaiting further clarity on trade policy and monetary policy direction.