Stocks slipped Tuesday after President Donald Trump's shaky commentary on global trade deals, dashing hopes that progress will soon be made on the tariff front. Investors also await the Federal Reserve's policy decision.
The Dow Jones Industrial Average lost 320 points, or about 0.8%. The S&P 500 shed about 0.6%, and the Nasdaq Composite dipped 0.7%.
Shares of Tesla shed more than 2% after the company's new car sales in Britain and Germany fell to their lowest in more than two years in April, even though demand for electric vehicles grew. Goldman Sachs shares dipped by less than 1%, pulling the Dow lower. Tech giants Nvidia and Meta Platforms also declined.
Stocks wavered after Trump met with Canadian Prime Minister Mark Carney on Tuesday afternoon, marking the start of negotiations between the two leaders since since Carney assumed office earlier this year.
Trump during the meeting walked back on promises that trade deals are on the horizon, saying "we don't have to sign deals." His statement contradicts Treasury Secretary Scott Bessent's comments earlier this week. Bessent told CNBC on Monday that "we're very close to some deals," echoing comments Trump made himself on Sunday that agreements could come as early as this week.
Bessent had reiterated this sentiment in testimony to the House appropriations committee on Tuesday, noting: "Approximately 97 or 98% of our trade deficit is with 15 countries. 18% of the countries are our major trading partners. And I would be surprised that if we don't have more than 80 or 90% of those wrapped up by the end of the year, and that may be much sooner that."
To be sure, official trade deals between the U.S. and its trading partners have yet been announced. And while data issued on Monday from the Institute for Supply Management showed stronger-than-anticipated service sector activity in April, concerns around tariffs persisted.
"We'll probably go down to new lows, even when Trump dials back China to 50%," billionaire hedge-fund manager Paul Tudor Jones told CNBC on Tuesday." "He'll dial it back to 50% or 40%, whatever. Even when he does that ... it'd be the largest tax increases since the 60s. So you can kind of take 2%, 3% off growth."
The Fed began Tuesday its two-day policy meeting, with a decision scheduled for Wednesday. The central bank is expected to widely expected to keep rates steady on Wednesday, with Fed Funds futures trading suggests just a 2.7% chance of the central bank cutting rates.
Still, traders will be listening for Fed Chair Jerome Powell's comments on his economic outlook.
"Despite external pressure to lower rates, the Fed will likely hold strong on the current pause until we see greater clarity on the major economic factors impacting the economy," said Steve Rick, chief economist at TruStage. "As the impacts of tariffs settle in, we still broadly expect the economy to continue to shift towards a slower pace of growth than in recent months."
President Donald Trump said Tuesday that he has not yet met with Chinese officials to discuss a potential trade agreement.
"They want to negotiate, and they want to have a meeting, and we will meet with them at the right time," he said.
He also indicated his administration was not actually going to strike trade agreements with every individual country, saying "we don't have to sign deals."
"For the most part, we're just going to put down a number and say this is what you're going to pay," Trump said.
Check out the companies making headlines in midday trading.
Palantir - Shares tumbled 13.4%. Palantir posted $884 million in first-quarter revenue, while analysts polled by LSEG penciled in $863 million. However, earnings per share came in line with Wall Street expectations at 13 cents.
Ford Motor - The automaker advanced 3.2% on better-than-expected first-quarter results, reversing an earlier decline. Ford reported adjusted earnings of 14 cents per share on $37.42 billion in revenue. Analysts surveyed by LSEG expected earnings of 2 cents per share and revenue of $36.21 billion. To be sure, management suspended its 2025 guidance, citing "near-term risks, especially the potential for industrywide supply chain disruption impacting production."
Upwork - Shares of the freelance marketplace platform popped 19% after the company reported a beat for both adjusted earnings and revenue for its first quarter. Upwork also lifted its full-year guidance for adjusted earnings.
The full list can be found here.
President Donald Trump exclaimed in a Truth Social post ahead of his first in-person meeting with Canadian Prime Minister Mark Carney that Canada needs "everything" from the U.S., while the U.S. does not need "anything" other than Canada's friendship.
"I very much want to work with him, but cannot understand one simple TRUTH - Why is America subsidizing Canada by $200 Billion Dollars a year, in addition to giving them FREE Military Protection, and many other things?" Trump said in his post, published at 11:23 a.m. on Tuesday.
"We don't need their Cars, we don't need their Energy, we don't need their Lumber, we don't need ANYTHING they have, other than their friendship, which hopefully we will always maintain," Trump continued. "They, on the other hand, need EVERYTHING from us! The Prime Minister will be arriving shortly and that will be, most likely, my only question of consequence."
Tensions between the U.S. and Canada have been increasing.
Last year, Canada traded with the U.S. more than any other country except Mexico, with total goods trade totaling roughly $762 billion, according to the office of the U.S. Trade Representative. Canadian exports to the U.S. took a hit in March, however, while its exports to other countries saw a significant uptick.
- Pia Singh, Kevin Breuninger
Palantir shares dropped nearly 12%, on pace for its worst day in about a year, as investors digested the defense technology provider's earnings report.
The company posted $884 million in first-quarter revenue, while analysts polled by LSEG penciled in $863 million.