S&P 500 Ends Winning Streak Amid Trade Tensions and Fed Decision Anticipation

The S&P 500 failed to close out a ten-day winning streak on Monday (05.05.2025) as investors closely monitored the latest developments in global trade. The broad Wall Street index had started the session with a nine-day winning streak, the longest since 2004, hoping for its tenth consecutive gain, which would have been its best run since a 12-day streak in 1995. However, the Dow Jones fell by 0.24%, the S&P 500 dropped by 0.62%, and the Nasdaq slid by 0.74%. At its lowest point, the Dow declined by up to 253.99 points, while the S&P 500 and Nasdaq each lost approximately 1% before partially recovering. Losses were mitigated after data from the Institute for Supply Management showed stronger-than-expected activity in the services sector in April, even as companies reported growing concerns about tariffs. Sentiment also improved following Bloomberg’s report that India proposed zero tariffs on steel, auto parts, and pharmaceuticals on a reciprocal basis and up to a certain import amount. Nonetheless, investors remain uncertain about the timeline for tariff agreements between the U.S. and other countries. Treasury Secretary Scott Besent stated on CNBC that ‘we are very close to some deals,’ echoing Trump’s remarks on Sunday that agreements could come as early as this week. Trump emphasized that he alone would decide the terms of any deal. He also authorized government agencies to begin imposing a 100% tax on films produced abroad, labeling foreign efforts to attract film productions as a ‘national security threat.’ It remains unclear if these taxes will affect movies shown in theaters or streaming services. Wall Street now looks ahead to the two-day Federal Reserve policy meeting starting Tuesday, with a rate decision expected on Wednesday. According to the CME Group’s FedWatch tool, futures contracts suggest only a 3.2% probability of an interest rate cut. Traders are watching closely for any comments from the central bank or Fed Chair Jerome Powell regarding economic prospects amid heightened uncertainty due to the trade war.