Stocks Face Uncertainty Amid Tariffs, Fed

Paul-Rejczak Paul Rejczak May 06, 2025

Will stocks retrace more of their recent advances?

The S&P 500 closed 0.64% lower on Monday, retracing some of last week's rally as tariff uncertainty continues to weigh on the market. The index snapped its nine-day rally - its longest winning streak since 2004.

This morning, U.S. stock futures are retreating further, with the S&P 500 expected to open 0.7% lower as investors react to tariff developments and await the Fed decision tomorrow.

Investor sentiment has further worsened, as shown in last Wednesday’s AAII Investor Sentiment Survey, which reported that only 20.9% of individual investors are bullish, while 59.3% are bearish.

The S&P 500 pulled back from 5,700, as we can see on the daily chart.

Stocks Face Uncertainty Amid Tariffs, Fed - Image 1

 

S&P 500 Futures Contract: Drifting Lower

This morning, the S&P 500 futures contract is dipping below the 5,650 level on growing uncertainty amid tariff developments, Fed decision tomorrow.

The resistance level remains around 5,700-5,720, while support is at 5,600, marked by the recent local low.

Stocks Face Uncertainty Amid Tariffs, Fed - Image 2

 

Conclusion

The S&P 500 is expected to open lower this morning, continuing Monday's retreat. The combination of tariff uncertainty and focus on the Fed meeting is creating a cautious market environment despite the recent rally.

Here’s the breakdown:

  • S&P 500 closed 0.64% lower on Monday, ending its nine-day winning streak.
  • Futures indicate a 0.7% lower open today as the Fed begins its two-day meeting.
  • Tariff concerns continue to weigh on sentiment, with several companies citing uncertainty in their guidance.


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Paul Rejczak
Stock Trading Strategist