Nasdaq 100: Palantir Tumbles, US Stocks Slip on Fed Uncertainty and Trade Risks

Stocks Slip as Trade Talks and Fed Decision Weigh on Market

Stocks were under pressure early in the session on Tuesday as traders took risk off the table ahead of the Federal Reserve’s policy decision and waited for clarity on global trade negotiations. The Dow Jones Industrial Average dropped 283 points, or 0.7%, while the S&P 500 and Nasdaq Composite declined 0.8% and 0.9%, respectively.

Losses were led by heavyweight tech stocks including Nvidia, Meta Platforms, and Tesla, each falling over 1%. Financials also weighed, with Goldman Sachs shares slipping.

Weak sentiment was driven by stalled trade deal announcements, even as comments from U.S. officials and foreign partners hinted at progress. President Trump met Canadian Prime Minister Mark Carney Tuesday, while reports pointed to potential tariff concessions from India. However, with no formal agreements in place, market optimism remained capped.

Are tariff worries starting to choke growth expectations?

Traders reacted to a record-setting March trade deficit, which jumped 14% to $140.5 billion. Imports surged 4.4% as businesses sought to front-load goods ahead of threatened tariffs. Exports, by contrast, inched up just 0.2%. On a yearly basis, the deficit widened by more than 90%, reflecting the pressure on U.S. trade balances as tariff threats loom.

Adding to concerns, hedge fund manager Paul Tudor Jones warned that equity markets may fall to new lows even if the White House scales back tariffs on China. “Even if Trump dials it back to 50% or 40%, it’ll still be the biggest tax increase since the ’60s,” he told CNBC. The S&P 500 last touched a closing low of 4,982.77 in early April.

Will the Fed provide any relief for equities?

The Federal Reserve kicked off its two-day policy meeting Tuesday. While traders broadly expect rates to remain unchanged—Fed Funds futures priced in just a 2.7% chance of a cut—focus will be on Chair Jerome Powell’s post-meeting commentary. Markets are looking for any signs of concern about trade risks or potential economic slowdowns.

Is tech losing momentum after a strong start to the year?

Palantir shares plunged 12% after the company topped revenue estimates and raised its full-year outlook. Despite strong growth—39% revenue increase year-over-year and net income doubling—Wall Street flagged slowing international commercial growth and margin pressure. Analysts also pointed to the company’s high valuation as a key vulnerability in the current tape. The drop highlights how even strong results may not be enough for high-flying names in an increasingly cautious market.

Market outlook

With no rate cut expected and little clarity on trade negotiations, equities may remain under pressure. Traders should monitor Powell’s remarks for any sign of a policy pivot and track developments in U.S. trade discussions. Earnings from major tech names and further economic data later this week will also help determine whether the market can stabilize or if new lows are ahead.

More Information in our Economic Calendar.