Stocks fell again on Tuesday as mixed messages from Washington cast doubt on the chances of new trade deals. President Trump said there’s no rush to sign agreements, contradicting earlier comments from Treasury Secretary Scott Bessent. Investors are also waiting on the Federal Reserve’s policy decision, which is expected on Wednesday. Oil prices jumped over 3%, and bond yields dropped after strong demand for a Treasury auction. The Dow fell nearly 400 points, and the S&P 500 and Nasdaq also closed lower for a second straight day.

Key Takeaways:

  • Dow Drops Nearly 400 Points as Trade Worries Deepen: The Dow Jones Industrial Average sank 389.83 points, or 0.95%, to 40,829.00, weighed down by declines in Goldman Sachs and Tesla. The index logged a second straight day of losses as uncertainty around trade policy and conflicting government messaging unsettled markets.
  • S&P 500 Logs Second Straight Loss as Tech Retreats: The S&P 500 fell 0.77% to 5,606.91, also marking its second consecutive decline. Nvidia and Meta weakened along with other large-cap names, as investors pulled back amid rising tensions around tariffs and US trade negotiations.
  • Nasdaq Slides as Mega-Cap Tech Names Fall: The Nasdaq Composite dropped 0.87% to close at 17,689.66, dragged down by selling in Tesla and other growth stocks. Traders grew concerned over slowing EV demand in Europe and broader trade risks affecting multinational tech firms.
  • Europe Slips as German Politics and UK Services Data Weigh: The pan-European Stoxx 600 slipped 0.18%, ending a 10-session winning streak. Germany’s DAX fell 0.4% but trimmed deeper losses after Friedrich Merz was elected chancellor in a second-round vote, following an earlier failed attempt. The FTSE 100 held its record run, inching up 0.01% to 8,597.42. France’s CAC 40 declined 0.40%, while Italy’s FTSE MIB advanced 0.22%. The UK’s services PMI fell to 49.0 in April from 52.5, marking the fastest pace of contraction since January 2023. 
  • Asia-Pacific Stocks Mixed as Trade Developments Evolve: Regional markets showed mixed performance as investors weighed shifting trade policies and currency moves. China’s CSI 300 jumped 1.01% to 3,808.54, its best level in a month, supported by a softer US tone on tariffs. Hong Kong’s Hang Seng rose 0.7% to 22,662.71. Australia’s ASX 200 ended flat at 8,151.40. Indian stocks declined, with the Nifty 50 down 0.29% and the Sensex losing 0.22% amid choppy trading. China’s services PMI slipped to 50.7, its lowest in seven months, raising questions about domestic demand. Japanese and South Korean markets were closed for public holidays.
  • Oil Rallies More Than 3% on Demand Optimism: Oil rebounded sharply as Brent rose $1.92, or 3.19%, to $62.15, and WTI gained $1.16, or 3.43%, to $59.09. Traders cited better demand prospects in Europe and China, along with increased geopolitical tension in the Middle East. Monday’s sharp decline, which followed OPEC+’s move to ramp up supply, was quickly reversed as buyers stepped back in. Both benchmarks recovered from technically oversold levels.
  • Yields Decline After Strong Treasury Auction: Treasury yields moved lower following a solid $42 billion auction of 10-year notes. The benchmark 10-year yield dropped over 3 basis points to 4.308%, and the 2-year yield fell 5 basis points to 3.793%. The notes cleared at a slightly lower-than-expected yield of 4.342%. 

FX Today:

  • EUR/USD Holds Support Near 1.1300 as Bullish Momentum Builds: EUR/USD rose 0.51% to close at 1.1371, holding firmly above the 1.1300 support zone and consolidating just below the recent April high near 1.1550. The pair remains well above all major moving averages, with the 50-day at 1.1010 and the 100-day and 200-day trending higher. Price action shows consolidation rather than reversal, suggesting bulls are pausing before another possible leg higher. Technicals remain strong as the uptrend continues from March lows. A break above 1.1450 would likely trigger the next wave of bullish momentum, while support at 1.1250 and the 50-day SMA serve as safety nets for dip buyers.
  • GBP/USD Maintains Bullish Posture, Eyes April Highs: GBP/USD closed at 1.3379, gaining 0.62% as the pair stayed near April’s highs. The recent uptrend that started near 1.2600 remains intact, supported by rising 50-day, 100-day, and 200-day SMAs. Price remains comfortably above the 1.3300 level, and the bullish structure shows continued strength with higher highs and higher lows. Resistance looms at 1.3450, with a breakout potentially exposing 1.3550. The 50-day SMA at 1.3034 and trendline support near 1.3000 offer downside protection. Unless price breaks below that zone, the overall bias remains positive with room for further gains.
  • USD/JPY Slides to 142.39 as Bears Extend Control: USD/JPY declined 0.89% to 142.39, marking a second consecutive bearish session and a return to the lower end of its recent range. Price remains well below all major SMAs, with the 50-day at 146.60 and the 100-day and 200-day trending downward. A failed attempt to reclaim the 145.00 area last week reinforced bearish pressure. Momentum remains negative, with sellers defending every rally attempt. Support lies near 141.50, and a break below that could open the door to 140.00 or even the April low near 139.00. Resistance remains strong between 145.50 and 147.00.
  • USD/CAD Slips Below 1.3700 as Downtrend Deepens: USD/CAD dropped 0.40% to 1.3677, extending its recent slide and testing fresh lows below the 1.3750 range floor. Price remains firmly below the 50-day, 100-day, and 200-day SMAs, all of which are sloping lower, confirming the dominant bearish trend. The pair has consistently formed lower highs and lower lows since March, with short sellers in control. Immediate support lies near 1.3600, followed by 1.3500. Resistance is seen at 1.3850 and then the 200-day SMA near 1.4008. The structure favours continued downside unless bulls reclaim 1.3900 on a daily close.
  • AUD/USD Breaks Higher, Tests Multi-Month Resistance: AUD/USD climbed 0.45% to finish at 0.6497, continuing its rally above the 200-day SMA at 0.6460. The pair has gained over 600 pips since forming a base near 0.5900 in April, reclaiming all key moving averages. The 50-day SMA has now crossed above both the 100-day and 200-day, reinforcing a shift in momentum. Price is testing the 0.6500 zone, a key resistance last seen in early 2024. A break above would confirm a medium-term trend reversal toward 0.6600. Support lies at 0.6400 and 0.6300, with dips likely to attract buyers as long as price stays above 0.6450.
  • Gold Surges Toward Highs as Bullish Momentum Strengthens: Gold jumped 2.59% to close at $3,422, posting its strongest one-day gain in nearly a month. The move pushed prices closer to the recent all-time high near $3,500, fuelled by technical strength and rising safe-haven demand. The metal remains above all major SMAs, with the 50-day at $3,103 providing dynamic support. Momentum indicators point higher, and the daily close near session highs signals strong buyer interest. Resistance is expected around $3,500, while short-term support holds near $3,335 and $3,240. As long as gold stays above $3,100, the bullish trend remains intact.

Market Movers:

  • Palantir Drops Despite Revenue Beat: Shares of Palantir fell more than 12% after reporting $884 million in Q1 revenue, topping the $863 million consensus. However, earnings per share matched expectations at 13 cents, and investors appeared disappointed by forward guidance.
  • Ford Rallies 2.7% on Strong Earnings Surprise: Ford gained 2.7% after reporting Q1 adjusted earnings of 14 cents per share, beating expectations of just 2 cents. Revenue came in at $37.42 billion versus $36.21 billion forecast. The automaker, however, suspended 2025 guidance.
  • Upwork Soars 18% After Raising Full-Year Outlook: Upwork surged 18% following a strong earnings report and improved guidance. The freelance platform beat both revenue and adjusted EPS expectations in Q1 and lifted its full-year earnings forecast, fueling investor enthusiasm.
  • Tesla Slips 1.8% on Weak Sales in UK and Germany: Tesla shares fell 1.8% after data showed new vehicle sales in the UK and Germany dropped to their lowest in over two years. Sales plunged 62% and 46% year over year in those countries, even as overall EV demand rose.
  • Hims & Hers Health Jumps 18.1% on Earnings Beat: Hims & Hers rallied after posting adjusted earnings of 20 cents per share, well ahead of the 12 cents expected. Q1 revenue also beat forecasts at $586 million. 
  • DoorDash Falls 7.4% on Revenue Miss and Acquisition News: DoorDash dropped sharply after Q1 revenue fell short. The company also announced a $1.2 billion acquisition of restaurant booking platform SevenRooms and a $3.9 billion acquisition of UK food delivery firm Deliveroo.
  • Neurocrine Biosciences Climbs Over 8% on Strong Drug Sales: Neurocrine shares jumped after Q1 results beat expectations. Sales of Ingrezza, a treatment for movement disorders, rose 8% year over year to $545 million, lifting overall revenue.
  • Vertex Pharmaceuticals Sinks 10% on Earnings Miss: Vertex dropped 10% after reporting adjusted Q1 earnings of $4.06 per share, below estimates of $4.32. Revenue also missed, coming in at $2.77 billion versus the expected $2.85 billion.

Markets remained on edge Tuesday as hopes for swift trade resolutions faded and investors turned cautious ahead of the Federal Reserve’s policy update. Despite upbeat oil prices and solid Treasury auction results, uncertainty stemming from President Trump’s mixed trade messaging and widening trade deficits weighed on risk appetite. Traders are now focused on Fed Chair Jerome Powell’s comments on Wednesday, which could provide critical clues on the central bank’s stance amid global economic crosscurrents. Until there is more clarity on both monetary policy and trade, volatility may persist across equities, bonds, and currencies.