Stock Market Update

[BRIEFING.COM] The stock market fell under selling pressure for a second consecutive session. The S&P 500 dropped 0.8% and the Nasdaq Composite logged a 0.9% decline. Consolidation efforts were among the driving factors in today's trade.

Renewed tariff concerns and cautious corporate guidance were also driving factors. Ford (F 10.44, +0.27, +2.7%) and Mattel (MAT 16.65, +0.45, +2.8%), which both reported above-consensus Q1 earnings, held off on providing full-year guidance. Ford warned that tariffs may cut $1.5 billion from its profits, while Mattel acknowledged the volatile macro-environment and said it plans to raise toy prices.

President Trump announced impending pharmaceutical tariffs, expected to be detailed within two weeks. This comes amid a U.S. trade deficit of $140.5 billion in March, driven by a preemptive surge in imports, including a $20.9 billion increase in imports of pharmaceutical preparations.

Treasury Secretary Bessent said in an oversight hearing on Capitol Hill that some trade deals could be announced as early as this week and that up to 90% of deals could be completed by the end of the year, but stocks didn't react much. 

Investors will also closely monitor the Federal Reserve's upcoming policy announcement for guidance on inflation and economic growth risks related to the tariffs. The May FOMC decision is tomorrow at 2:00 ET.

Treasuries settled with gains. The 10-yr yield dropped four basis points to 4.31% and the 2-yr yield dropped five basis points to 3.79%.

• Dow Jones Industrial Average: -4.0% YTD
• S&P 500: -4.7% YTD
• S&P Midcap 400: -6.9% YTD
• Nasdaq Composite: -8.4% YTD
• Russell 2000: -11.1% YTD

Reviewing today's economic data:

• The trade deficit widened to a record $140.5 billion in March (Briefing.com consensus -$127.5 billion) from a downwardly revised $123.2 billion (from -$122.7 billion) in February. The widening was the result of March exports being $0.5 billion more than February exports and March imports being $17.8 billion more than February imports.
  • The key takeaway from the report is the surge in imports, which detracted sharply from Q1 GDP, and was highlighted by a $22.5 billion increase in imports of consumer goods that was led by a $20.9 billion increase in pharmaceutical preparations.

Looking ahead to Wednesday, market participants receive the following data:

• 7:00 ET: Weekly MBA Mortgage Index (prior -4.2%)
• 10:30 ET: Weekly crude oil inventories (prior -2.696 mln)
• 15:00 ET: March Consumer Credit (Briefing.com consensus $11.0 bln; prior -$0.8 bln)