Wall Street Slides Amid Interest Rate Concerns and Trade Uncertainty

Wall Street opened lower for the second consecutive day, as technology stocks led the decline on Tuesday. The S&P 500 fell by 0.7%, ending its nine-day winning streak, while the Dow Jones Industrial Average dropped 255 points, or 0.6%. The Nasdaq composite slid by 1% as traders adopted a cautious stance ahead of the Federal Reserve’s two-day meeting.

Market analysts expect the Fed to maintain its benchmark interest rate, despite inflation concerns heightened by ongoing trade policy uncertainties under President Donald Trump’s administration. The Fed’s decision comes after three rate cuts in 2024, but with inflation still marginally above the 2% target, officials are treading carefully. “Traders appear to be taking profits and moving to the sidelines ahead of the Federal Reserve’s FOMC meeting,” noted David Morrison, senior market analyst at Trade Nation.

Corporate Warnings and Trade Tensions

Concerns over trade policies continued to weigh on market sentiment, as several major companies adjusted financial guidance. Ford Motor Co. reduced its operating profit forecast by $1.5 billion, attributing the adjustment to tariff-related uncertainties. General Motors also revised its 2025 guidance, citing a potential $5 billion impact from tariffs.

Meanwhile, DoorDash saw its shares decline by over 5% following its $3.9 billion acquisition of UK-based food delivery service Deliveroo, aimed at expanding its reach in Europe, Asia, and the Middle East. Clorox shares dropped 3.2% after the company missed quarterly targets and lowered its forecasts due to macroeconomic challenges.

Global Markets and Oil Rebound

In Europe, Frankfurt’s stock market dipped 0.7% after German conservative leader Friedrich Merz lost a key vote for chancellor. Paris slipped 0.4%, while London remained flat in afternoon trading. In Asia, optimism emerged as some governments advanced trade agreements aimed at mitigating the impact of Trump’s tariffs.

Oil prices rebounded over 2% after a sharp drop, as OPEC+ announced a production increase of 411,000 barrels per day for June. Despite lingering fears of a global economic slowdown, the energy sector showed resilience, with market participants closely monitoring future output decisions.