Markets Slip as Trade Talks and Tariff Uncertainty Weigh on Wall Street

U.S. stocks dipped on Monday as Wall Street took a breather after a strong rally and turned its attention to ongoing global trade negotiations. Investors grew cautious, waiting to see how President Donald Trump’s tariff strategies might evolve in the coming days.

The Dow Jones Industrial Average fell 99 points, or 0.24%, while the S&P 500 dropped 0.64%, snapping a nine-day winning streak—its longest since 2004. The Nasdaq Composite, heavily weighted with tech stocks, declined 0.74%. The Dow also ended its own nine-day rally, its longest since 2023.

This comes nearly a month after Trump announced a 90-day pause on new tariffs for countries other than China. While this pause has lifted market sentiment over the past few weeks, uncertainty still lingers over what long-term trade deals might look like.

“The market is reacting day-by-day to any hint of what future tariff levels could be,” said Jed Ellerbroek of Argent Capital Management. “But nobody really knows how this will play out.”

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Administration Signals Progress on Trade Talks

Treasury Secretary Scott Bessent told CNBC on Monday that trade agreements with several countries are “very close.” Trump echoed this optimism on Sunday, stating that new deals “could very well” happen within the week.

“I set the deal—they don’t set the deal,” Trump told reporters aboard Air Force One, signaling his continued hands-on approach.

Despite the upbeat tone, Ellerbroek said he’s skeptical that comprehensive deals will come together within the 90-day window. “I don’t expect a fully satisfying resolution to the tariff issue anytime soon,” he noted.

Tariff Confusion Still Clouding the Market

Stocks initially opened lower Monday, but losses were softened after a new Institute for Supply Management report showed growth in the services sector for April. However, it also pointed to rising costs and ongoing tariff-related anxiety.

“The inconsistency of U.S. tariff policy continues to be a major concern,” a real estate industry respondent told ISM.

Adding to the market’s uncertainty was Trump’s announcement of a proposed 100% tariff on foreign-made films. While the White House later clarified that no final decision has been made, shares in entertainment companies slipped as Hollywood tried to grasp the potential impact.

Here’s how some of the biggest film companies fared Monday:

• Netflix: -1.94%
• Disney: -0.41%
• Paramount: -1.57%
• Warner Bros. Discovery: -1.99%

“Markets remain highly sensitive to negative policy surprises,” analysts at Invesco said in a research note.

Commodities Show Mixed Signals

Meanwhile, oil prices took a hit after OPEC+ revealed plans to boost production. U.S. crude fell nearly 2% to $57.13 a barrel, reaching a four-year low, while Brent crude slipped 1.7% to $60.25.

Gold, on the other hand, surged 2.5%, climbing above $3,300 per troy ounce, as investors sought safety in the precious metal. Earlier this year, gold had briefly reached a record high of $3,500.

All Eyes on the Fed

Looking ahead, all attention now turns to the Federal Reserve, which is expected to keep interest rates steady during its policy meeting this week. Fed Chair Jerome Powell will speak Wednesday, and markets are eager for clues about future rate moves.

“Amid all the trade and tariff turmoil, the Fed is likely to stay on the sidelines for now,” said Greg McBride of Bankrate.

Strong job numbers from last week have also cooled expectations for any immediate rate cuts. Analysts at Barclays and Goldman Sachs have pushed their forecasts for the first rate cut from June to July.

Meanwhile, CNN’s Fear and Greed Index showed that “Greed” returned to dominate market sentiment for the first time since December, showing that optimism, while fragile, is still alive on Wall Street.