Stock market momentum momentarily halts amid unrest sparked by President Trump's market-affecting statements, ending a nine-day winning streak for the S&P 500.
The S&P 500 slips on Monday, May 5, 2025, amid trade tensions
US stocks took a hit on Monday, marking the end of a remarkable rally and snapping a nine-day winning streak - unseen since 2004. The S&P 500 dropped 0.64% to 5,650.38, while the Nasdaq Composite fell 0.74% to 17,844.24. The Dow Jones Industrial Average dipped a touchy 0.24% to 41,218.83.
The market experienced a gloomy opening, with President Trump raising trade rhetoric over the weekend, proposing a 100% levy on foreign films. However, it's essential to note that this news didn't directly impact stocks. Instead, concerns about global trade policies and tariffs, particularly the uncertainty surrounding trading partners like China, sparked caution among investors.
The tension continued as Trump shared he had no plans to speak with President Xi Jinping, despite earlier hopes of resumed talks. Investors closely monitored the situation, waiting for news on potential tariff revisions. Losses across the major indexes deepened during the day but eased later due to stronger-than-expected U.S. services sector data and a Bloomberg report suggesting India may offer tariff-free access for select goods on a reciprocal basis.
Buckle up: Trade deals are on the horizon
Treasury Secretary Scott Bessent hinted that trade deals are close, mirroring Trump's comments about new agreements expected this week. Yet, investors remain skeptical about finding a lasting resolution.
The market's pullback precedes a critical Fed decision on Wednesday. Markets currently predict a mere 3.2% chance of a rate cut. However, investors will pay close attention to Fed Chair Jerome Powell for his commentary on the economic outlook amid trade uncertainty.
100% HODL no more: Riot sells more Bitcoin than mined in April
Amidst the market's pullback due to trade tensions, Ethereum, the second-largest crypto by market cap, saw a slight dip of 0.70%, bringing its price down to $3,281.
The ICO boom of 2017 has long passed, but Tron, a popular blockchain-based platform, continues to make waves in the DeFi space, with its TRX token trading at an average of $0.065.
Crypto investors may be rethinking their 'HODL' strategy after Riot, a prominent Bitcoin mining company, revealed the selling of more Bitcoin than mined in the month of April.
The stock market's pullback has also had an impact on the finance and business technology sector. The average venture capital funding for tech startups saw a slight downturn, with many investors opting to wait for clarity on global trade policies.
Despite the market's gloom, some businesses have continued to focus on innovative technologies, with many major DeFi projects moving away from ICOs and towards decentralized exchanges (DEXs).
Investors are aware that this current market situation might just be a temporary pullback before a bullish streak. They're keeping a close eye on the Dow Jones Industrial Average, which, although dipped slightly, is still significantly higher than its pre-pandemic levels.
The market's turbulent journey reminds us that investing always comes with its share of risks, and it's crucial to stay informed and adapt to the changing landscape of global finance and technology.
Buckle up, as trade deals are on the horizon and the Federal Reserve’s decision on Wednesday could potentially reshape the trajectory of the market. Armed with this information, investors may find this an opportune moment to make strategic financial decisions.
