U.S. Stocks Slip as Trade Tensions and Fed Decision Loom

U.S. stocks slip as trade tensions and uncertainty ahead of the Fed's meeting overshadow market optimism - IcoHolder.

U.S. stocks slipped on Monday, bringing an end to a historic rally as investors turned cautious amid renewed trade tensions and ahead of a key Federal Reserve meeting. The S&P 500 dropped 0.64% to 5,650.38, breaking a nine-day winning streak—the longest since 2004. The Nasdaq Composite fell 0.74% to 17,844.24, and the Dow Jones Industrial Average dipped 0.24% to 41,218.83.

The decline was triggered in part by President Trump’s escalated rhetoric over tariffs, including a proposed 100% levy on foreign films, which pressured shares of Netflix and Paramount. This move added to the uncertainty surrounding ongoing trade negotiations, especially with China. Despite earlier hopes of resumed talks, Trump indicated he had no plans to speak with President Xi Jinping.

As losses across major indexes deepened throughout the day, the market received a brief boost from stronger-than-expected data on the U.S. services sector, along with a Bloomberg report suggesting that India may offer tariff-free access for certain goods in a reciprocal agreement.

Treasury Secretary Scott Bessent echoed Trump’s comments, suggesting that new trade deals could be imminent, possibly as soon as this week. However, many investors remain skeptical of the timeline and potential outcomes.

The pullback in the markets comes just ahead of the Federal Reserve’s decision on Wednesday. While markets are pricing in only a 3.2% chance of a rate cut, all eyes will be on Fed Chair Jerome Powell’s comments on the economic outlook, particularly regarding trade uncertainty and its impact on growth.