Wall Street Week Ahead: Trade Fears & Fed Watch

Fresh news and strategies for traders. SPY Trader episode #1142.
Hey there, market mavens! It's your pal, Benny 'The Bull' Butterfield, here to guide you through the wild world of Wall Street. It's 12 pm on Monday, May 5th, 2025, Pacific time, and the markets are already serving up a mixed bag. Buckle up, because we've got a lot to unpack today!

First, let's dive into the headlines. The S&P 500 closed Friday at 5,686.68, enjoying a sweet 1.5% gain, closing out a nineday winning streak – the longest since 2004. The Dow Jones Industrial Average jumped 1.4%, landing at 41,317.43, and the Nasdaq Composite mirrored the gain, closing at 17,977.73. But hold your horses, folks! Stock futures are pointing lower as we start the week. Overall, the US500 is down 3.49% since the beginning of the year.

Now for the notsosunny news: trade tensions between the U.S. and China are back on the front burner. President Trump is talking about slapping a potential 100% tariff on foreignproduced movies! Plus, there’s no meeting planned with China's President Xi this week. He did mention that there may be trade deals with other countries, however. Several companies like Netflix, Disney, and Comcast are feeling the heat because of this talk of tariffs. The market had already baked in the possibility of these tariffs from April, and Investors are concerned about the overall impact to the economy.

The Fed is meeting this Wednesday, and while rates are expected to stay put, all eyes will be on Chairman Powell's commentary. The market's pricing in several rate cuts this year, which some folks think is a bit too optimistic unless the jobs market really cools down. Economic data shows the ISM Services PMI accelerated unexpectedly. Factory Orders for March came in at 4.3%. Nonfarm Payrolls in April were at 177,000. The unemployment rate is unchanged at 4.2%.

Oh, and in other news, Warren Buffett announced he's retiring at the end of the year. Berkshire Hathaway's earnings took a dip in the first quarter, too.

Alright, let's break this down. The market's jittery about those trade tensions. Tariffs could mean higher costs for consumers and slower economic growth. Given this uncertainty, it might be wise to consider shifting towards defensive sectors like utilities, consumer staples, and healthcare. These tend to hold up better when the economy hits a rough patch.

Keep a close watch on companies reporting earnings. Palantir and Ford are up today. Tyson Foods beat earnings estimates, but revenue was a little soft. These companyspecific stories can offer clues about the overall health of the market.

Given the current volatility, diversification is your friend. Look at overseas markets, both developed and emerging. Also, remember to keep a longterm perspective and focus on companies with solid financials and growth potential.

Now, for some actionable ideas. I'm keeping an eye on those defensive sectors I mentioned earlier. Given the economic concerns, these areas could offer some relative stability. Also, monitor companies closely tied to trade, like Apple, Nvidia, and Walmart. News about tariffs and trade deals will likely impact their stock prices.

Here's a familyfriendly finance joke for you:

Why did the stock market go on a diet?

Because it had too many 'tariffs'!

Hope that brings a smile, even amidst market fluctuations!

Remember, folks, I'm just a friendly financial analyst sharing my thoughts. Do your own research and talk to a qualified advisor before making any big moves. Until next time, this is Benny 'The Bull' Butterfield, signing off. Keep those portfolios diversified and your spirits high!