Good morning. Stocks hit pause on Tuesday, as the two-day FOMC meeting nears its conclusion and investors brace for more clarity on monetary policy, trade negotiations, and earnings. The S&P 500 posted back-to-back losses for the first time since late April, with tech and healthcare stocks leading the decline.

The Fed is widely expected to hold rates steady today, but market attention will focus squarely on Chair Powell’s comments regarding tariffs, inflation, and the economic outlook. Meanwhile, U.S.-China trade negotiations are back in the headlines, with some signs of diplomatic thaw—though tensions remain high. On the earnings front, guidance continues to weigh heavily, even when headline numbers beat expectations.

Buy-the-Dip Keeps the Bulls Alive
The Economist examines how the persistent habit of “buying the dip” has helped sustain this bull market through geopolitical shocks and macro uncertainty. As investors remain primed to re-enter at the first sign of weakness, volatility spikes have become shorter-lived. But the article warns this resilience could weaken if a broader earnings slowdown materializes.
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U.S.-China Officials Plan Talks Amid Trade Fight
According to the Wall Street Journal, American and Chinese officials are planning in-person trade talks for the first time in months, amid rising tariffs and export restrictions. While both sides face domestic economic pressures, there is little clarity on what a compromise might look like. The article suggests real progress remains uncertain without broader political alignment.
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EV Sales Decline as Consumers Rethink
Electric vehicle sales fell in April, according to a WSJ report, with price sensitivity, charging infrastructure, and tariff risks all weighing on demand. Ford’s pullback on guidance underscored the cost pressures from the new tariff regime, which may continue to complicate the sector’s growth narrative. Analysts suggest competition and tax policy will be key watchpoints.
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China Cuts Rates to Offset Tariff Impact
MarketWatch reports China’s central bank unexpectedly lowered a key interest rate in a bid to shore up economic momentum and cushion against the effects of U.S. tariffs. The move comes as Chinese officials weigh renewed trade talks. Analysts say the rate cut signals concern over weakening domestic demand and slowing export activity.
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Tariffs Cloud Semiconductor Outlook
CNBC details how chip stocks are under pressure as Trump administration tariffs collide with China’s export restrictions on rare earths and semiconductors. The combined effect has weighed heavily on U.S. tech firms and raised fears about global supply chain disruptions. Companies like Nvidia, Intel, and TSMC are all navigating a rapidly evolving regulatory and geopolitical landscape.
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Stocks Look Pricey Again as Fed Looms
Bloomberg points out that despite the recent pullback, equity valuations are once again elevated relative to historical norms. The price-to-earnings ratio for the S&P 500 has climbed above 21x forward earnings, raising the stakes for today’s Fed decision. The article explores whether strong earnings can offset macro risks long enough to justify current multiples.
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U.S. stocks closed lower for a second straight day, giving back some of the recent gains as sentiment cooled. The S&P 500 finished down modestly, with healthcare and biotech dragging the index lower. Treasury yields eased slightly, while gold surged ahead of today’s FOMC meeting. Oil rebounded sharply, and Bitcoin hovered around the $95,000 level.

Markets are now at a key inflection point. With the Fed’s decision looming and earnings season nearing its final stretch, investors are searching for direction. Add in trade tensions and mixed economic data, and it’s no surprise volatility is starting to return. Stay tuned for Powell’s remarks—today’s messaging could shape the next leg of this rally, or spark a turn lower.