New York’s three major stock indices extended their losses on Tuesday, marking a two-day decline following the previous session’s drop.
As the Federal Reserve began its FOMC meeting, investors adopted a wait-and-see approach, eager to hear the Fed’s outlook on future interest rate cuts when the meeting concludes on Wednesday.
Additionally, market participants are closely monitoring trade negotiation developments, with expectations that the U.S. will conclude more trade agreements this week.
Two-day Decline Continues
The Dow Jones Industrial Average shed 389.83 points (0.95%) to close at 40,829.00.
The S&P 500 index fell 43.47 points (0.77%) to 5,606.91, while the Nasdaq Composite dropped 154.58 points (0.87%) to 17,689.66.
FOMC Meeting and Trade Negotiations
Investors are keenly watching the Fed’s FOMC meeting, adopting a wait-and-see stance.
While it’s almost certain that the central bank will maintain the benchmark interest rate at 4.25-4.5% after the Wednesday meeting, investor attention is concentrated on any hints Chair Jerome Powell might provide regarding future rate cuts.
Investors have adjusted their expectations from four rate cuts starting in June to three cuts beginning in July.
U.S. trade negotiations are also commanding attention.
U.S. President Donald Trump met with Canadian Prime Minister Mark Carney, beginning trade talks between the two nations.
The Financial Times reports that the U.K. is also expected to reach a trade agreement with the U.S. as early as this week.
Treasury Secretary Scott Bessent stated on Monday that they are very close to some trade agreements.
However, during his meeting with Carney, Trump emphasized that the U.S. is not rushing into a trade agreement, stating that they don’t necessarily have to sign an agreement.
Tesla’s Sales Slump Persists in Germany and the UK
Tesla continues to face challenges in the German and British markets.
New car sales in April amounted to only 885 units in Germany and 512 in the UK, representing sharp declines of 46% and 62% respectively compared to a year ago.
While overall electric vehicle sales have increased in both countries, Tesla’s sales have plummeted.
The negative perception surrounding CEO Elon Musk, who heads the Trump administration’s Department of Government Efficiency (DOGE), appears to be damaging the brand’s image and suppressing demand.
Despite the sales slump, Tesla’s stock price remained relatively stable, closing down 4.91 USD (1.75%) at 275.35 USD.
Other M7 major tech stocks also declined.
Nvidia dipped 0.28 USD (0.25%) to 113.54 USD, while Apple fell 0.38 USD (0.19%) to 198.51 USD.
Alphabet dropped 0.85 USD (0.51%) to 165.20 USD, and Microsoft (MS) lost 2.86 USD (0.66%) to close at 433.31 USD.
Meta Platforms declined 11.96 USD (2.00%) to 587.31 USD, and Amazon finished down 1.34 USD (0.72%) at 185.01 USD.
Biotech and Pharma Stocks Tumble
Biotech and pharmaceutical stocks took a significant hit.
The decline was fueled by Trump’s push for pharmaceutical tariffs and expectations of tighter vaccine regulations from the U.S. Department of Health.
The Department of Health appointed Dr. Vinay Prasad, a figure skeptical of FDA policies and critical of COVID-19 measures, as the head of vaccine regulation at the FDA.
This news sent shockwaves through the sector. COVID-19 vaccine maker Moderna plunged 3.41 USD (12.25%) to 24.43 USD, and Pfizer dropped 0.99 USD (4.15%) to 22.88 USD.
Eli Lilly, which recently became the world’s largest pharmaceutical company by market capitalization thanks to its weight-loss drug, saw its stock tumble 46.34 USD (5.64%) to 775.12 USD.
Gilead Sciences also fell 4.93 USD (4.80%) to 97.88 USD.
