By Alex Financials

Trade Tensions Resurface: Trump’s Tariff Announcements Shake Markets

On May 5, 2025, U.S. stock markets opened lower, breaking a nine-day winning streak for the S&P 500—the longest in two decades. The downturn was largely attributed to President Donald Trump’s announcement of a 100% tariff on foreign-made films, aiming to bolster the U.S. film industry. This move sparked concerns over escalating trade tensions and potential retaliatory measures from trading partners.

Entertainment giants such as Netflix ($NFLX), Walt Disney ($DIS), and Warner Bros. Discovery ($WBD) experienced notable stock declines in response to the tariff news. The broader market also felt the impact, with the S&P 500 falling 0.7%, the Nasdaq Composite dropping 0.8%, and the Dow Jones Industrial Average decreasing by 0.4%. ​

Buffett’s Retirement Announcement Sends Ripples Through Berkshire Hathaway

In a significant leadership transition, Warren Buffett announced his intention to retire as CEO of Berkshire Hathaway ($BRK.A) by the end of the year, after more than six decades at the helm. Greg Abel, currently overseeing Berkshire’s energy operations, has been named as his successor. Following the announcement, Berkshire Hathaway’s stock fell over 5%, reflecting investor uncertainty about the company’s future direction.​

Buffett also issued a cautionary note to investors regarding the traditionally stable utility sector, highlighting increased risks due to climate change-induced wildfires. He pointed to significant financial liabilities faced by utility companies like PG&E ($PCG) and Hawaiian Electric ($HE) as examples of the sector’s growing vulnerabilities.​

Oil Prices Plummet as OPEC+ Announces Production Increase

Oil markets reacted sharply to OPEC+’s decision to boost production by 411,000 barrels per day starting June 1. U.S. crude oil prices dropped to $57.42 per barrel, marking a four-year low. The oversupply concerns, coupled with fears of an economic slowdown, led to a 2.6% decline in oil prices.​

Energy sector stocks were adversely affected, with Exxon Mobil ($XOM) shares falling 2.4%. The broader market also felt the pressure, as declining oil prices signaled potential challenges ahead for the global economy.​

Anticipation Builds Ahead of Federal Reserve’s Interest Rate Decision

Investors are closely watching the Federal Reserve’s upcoming meeting, where the central bank is expected to announce its latest decision on interest rates. With inflation still hovering above the Fed’s 2% target, the market is on edge about potential rate hikes. The 10-year Treasury yield has risen to 4.35%, reflecting these concerns. ​

The Fed’s decision will be pivotal in shaping market expectations and could either alleviate or exacerbate current economic uncertainties.​

Earnings Reports in Focus: Palantir and Ford Set to Announce Results

Investors are awaiting earnings reports from Palantir Technologies ($PLTR) and Ford Motor Company ($F), both scheduled to release their quarterly results after market close. Palantir is projected to report significant revenue growth, while Ford’s performance will be scrutinized in light of potential cost impacts from proposed vehicle tariffs.

These reports will provide insights into how companies are navigating the current economic landscape marked by trade tensions and shifting consumer demands.​

Market Snapshot: Tech Stocks Under Pressure

Major technology stocks faced headwinds amid the broader market downturn. Apple ($AAPL) shares declined by 3.15%, closing at $198.88. Tesla ($TSLA) experienced a 4.15% drop, ending the day at $275.28. Amazon ($AMZN) also saw a decrease of 1.41%, with shares closing at $187.30. These declines reflect investor caution as the market grapples with multiple uncertainties.​

As the week unfolds, market participants will continue to monitor developments in trade policies, corporate earnings, and monetary policy decisions to gauge the direction of the U.S. economy and financial markets.​