Wall Street’s main indexes declined on Tuesday as investors faced uncertainty surrounding U.S. President Donald Trump’s tariffs and awaited the Federal Reserve’s interest rate decision. Trump’s announcement of new pharma tariffs set off volatility in the market, while the potential for trade agreements later this week offered a glimmer of hope for investors.
Tariff Announcements and Market Impact
President Trump announced that new tariffs on pharmaceuticals would be introduced in the coming weeks, prompting a significant drop in shares of major pharmaceutical companies like Eli Lilly, Merck, and Pfizer. Eli Lilly and Merck fell over 3% each, while Pfizer declined by 1.7%. The news contributed to market uncertainty, but indexes rebounded somewhat after Treasury Secretary Scott Bessent hinted at potential trade agreements.
Uncertainty Looms Over Federal Reserve’s Decision
As investors remained cautious, the Federal Reserve’s two-day meeting began on Tuesday. The central bank is expected to hold interest rates steady, but market participants will be closely watching for any signals about potential rate cuts later in the year. Currently, traders are pricing in a 25-basis-point cut in July.
Sector Performance and Notable Stock Moves
Healthcare stocks took a hit, with the sector falling by 1.7%, while utilities saw a modest increase of 1.5%, driven by Constellation Energy’s 9.8% surge after a strong earnings report. On the other hand, shares of data analytics firm Palantir dropped 12.5%, and Ford Motor also faced volatility, suspending its annual outlook amidst the ongoing tariff uncertainty.
Trade Deficit Hits Record High
In March, the U.S. trade deficit reached a record $140.5 billion, fueled by increased imports. The rise in imports added to the overall market uncertainty, underscoring the complex effects of the ongoing tariff war. Meanwhile, meal delivery service DoorDash saw a 7.2% drop in shares following disappointing earnings and the announcement of its acquisition of Deliveroo.
Investor Sentiment and Broader Market Trends
The market sentiment remained mixed, with declining issues outnumbering advancers. The S&P 500 recorded 7 new 52-week highs and 6 new lows, while the Nasdaq Composite posted 17 new highs and 75 new lows, reflecting the ongoing volatility and uncertainty in the market.
