S&P500 Today: Traders Cautious on Fed Commentary as Tech Stocks Fade

S&P 500 Drifts Lower as Traders Brace for Fed Commentary and Tariff Impacts

The S&P 500 edged lower Tuesday afternoon, on track to break its six-day winning streak as investor focus shifted to Federal Reserve commentary and renewed trade policy concerns. With the Nasdaq and Dow also slipping, traders moved into a holding pattern, awaiting new catalysts to justify further upside.

Will Fed Officials Signal a Rate Cut or Hold Firm?

At least seven Federal Reserve speakers, including St. Louis Fed President Alberto Musalem, are lined up today, keeping traders on edge for any fresh policy clues. Rate cut expectations are still anchored around September, with markets pricing in two 25-basis-point cuts by the end of the year. However, uncertainty over the Fed’s tolerance for new inflationary pressures from recent tariffs is raising questions about that path.

How Are Indexes and Key Sectors Performing Into the Close?

By mid-afternoon, the Dow had fallen 106 points, the S&P 500 was off 0.35%, and the Nasdaq dropped 0.40%. The pullback comes after a strong run that pushed the S&P 500 more than 17% off its April lows. Nine of eleven sectors were down, with information technology leading the decline. The market is showing signs of fatigue after a rapid rally driven more by sentiment than substantial news.

Are Any Stocks Breaking the Pattern?

Home Depot held slight gains after beating Q1 sales expectations, but most growth names traded lower. Tesla outperformed, gaining 1.8% after Elon Musk reiterated his long-term leadership plans at a forum in Qatar. Nvidia slipped ahead of its earnings next week, with traders locking in gains following a sharp AI-driven run-up.

Which Earnings Could Move the Tape After Hours?

Traders will be watching Palo Alto Networks closely after the bell. The cybersecurity firm is expected to post fiscal Q3 earnings with analysts projecting $0.77 in adjusted EPS on $2.28 billion in revenue. With investor interest high in AI-integrated security platforms, any strong guidance or product updates could trigger a post-market reaction, particularly in the tech sector already under pressure.

What’s the Outlook from Here?

With major indexes still just a few percent off all-time highs, the next directional move could hinge on economic data and Fed tone. Preliminary May PMI data later this week and Nvidia’s earnings on May 28 may provide fresh momentum. Until then, equities could trend sideways, with limited appetite for risk ahead of clarity on rates and policy.

More Information in our Economic Calendar.