US Stock Rally Cools as Fed Meeting Nears, Tariff Doubts Linger

o1e2{qeb3aj26]meppsw7h5j_media_dl_1.png Bloomberg

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(Bloomberg) — US stocks fell Monday with the S&P 500 on track to snap its longest winning streak in two decades as mixed messages on trade policy clouded the market outlook. 

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The S&P 500 fell 0.7% as of 9:33 a.m. in New York, the Nasdaq 100 declined 0.8% and the Dow Jones Industrial Average lost 0.5%. 

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Investors’ attention is also shifting to the Federal Reserve meeting on Wednesday as President Donald Trump insists he doesn’t plan to fire Jerome Powell, but continues to push him to cut rates.

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Trump told reporters aboard Air Force One that the US could strike trade deals with some countries as soon as this week. He added that while he has no plans to speak with Chinese President Xi Jinping in the coming days, he remains open to easing tariffs on China at some point.

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A trade agreement with China would be a prerequisite for the US market to sustain its recent gains, according to strategists at Morgan Stanley led by Michael Wilson. A near-term deal would reassure businesses that supply chains will face limited disruption, they said.

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The recent rally, which saw the S&P 500 erase nearly all of April’s tariff-driven losses, took a breather. The index broke above its 50-day moving average and the next resistance level sits at a 5,746, its 200-day moving average. 

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“Historically, the 200-day moving average has often acted as a ‘rusty door’ that often needs a few hard pushes to swing open, so we would view any consolidation or pullback of about 3% to 5% as an opportunity to add to positions,” wrote Craig Johnson, chief market technician at Piper Sandler. 

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Among single stock movers, Berkshire Hathaway Inc. is down 6.35% after Warren Buffett announced he would step down at the end of the year. The company’s operating earnings fell about 14% from a year earlier and its cash pile surged to a record $347.7 billion. Watch media and entertainment stocks after Trump announced plans to impose 100% tariffs on films produced overseas. Shares of Netflix slid 3.10%. Tyson shares are down after the protein producer reported mixed quarterly results, including a slight sales miss and weakness in beef margins, though a beat on adjusted EPS.

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In the energy space, Shell Plc is working with advisers to evaluate a potential acquisition of BP Plc, according to people familiar with the matter. Oil stocks are also in focus as crude sinks after OPEC+ agreed to another bumper output increase.

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