NEW YORK: The S&P 500 and the Nasdaq were lower on Monday after US President Donald Trump rekindled worries about the fallout of a global trade war by introducing new tariffs, while focus remained on the Federal Reserve’s monetary policy decision later this week.
On Sunday, Trump announced a 100% tariff on movies produced outside the US but offered little clarity on how the levies would be implemented.
Several movie and television production companies took a hit. Netflix fell 2.1% and was set to snap an 11-session winning streak, while Amazon.com was down 1.2%. Paramount Global slipped 1%.
However, the top indexes were well above their session lows, as investors hoped for some reprieve on the trade tariff front with negotiation talks underway.
“The market has a slight positive lean towards it right now, believing that these trade tariffs are either going to be reduced or they’re going to come to some type of an agreement,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
Markets were also taking a pause after the S&P 500 notched its ninth session of gains on Friday, a streak last seen in 2004.
At 11:30 a.m. ET, the Dow Jones Industrial Average rose 26.93 points, or 0.07%, to 41,344.36, the S&P 500 lost 21.19 points, or 0.37%, to 5,665.48 and the Nasdaq Composite lost 93.56 points, or 0.52%, to 17,884.17.
Most megacap stocks were lower, with Tesla and Apple down over 3% each, while gains in some financial stocks buoyed the Dow.
Energy stocks were the biggest loser, down 1.7% as crude prices dropped on anticipation of increased supply by OPEC+ countries.
Class B shares of Berkshire Hathaway were down 4.4% after Warren Buffett said he will step down as CEO of the conglomerate. The stock pressured the S&P 500 financials sector .
Meanwhile, an ISM survey showed services sector’s growth picked up in April as orders increased and indicated a buildup in inflation pressures.
The spotlight will be on the Fed this week, which is widely expected to keep interest rates on hold. Investors will closely
monitor the commentary from central bank policymakers to gauge their approach to monetary policy easing this year amid tariff impacts.
Traders are pricing in 25 basis points of easing by the Fed by July, and see a total of 80 points of cuts by the end of the year, according to data compiled by LSEG.
On the earnings front, investor attention is on how companies are navigating tariff-induced uncertainty. Tyson Foods dropped 9.2% after the meat packer missed quarterly revenue expectations.
US-listed shares of gold miners Gold Fields Ltd and Anglogold Ashanti gained 8% and 4.5%, respectively, tracking higher gold prices.
Skechers jumped about 25% after the footwear maker agreed to be taken private by 3G Capital in a $9.4 billion deal.
Declining issues outnumbered advancers by a 1.17-to-1 ratio on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and three new lows, while the Nasdaq Composite recorded 40 new highs and 39 new lows.
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