Market Report for Tuesday, May 6, 2025
After a nine-day sprint, stocks took a breather Monday. The S&P 500 fell for the first time since April 22, with sellers sniffing profit and buyers short on conviction. Not a rout—more like a shrug with side-eye.
Level Change 5/5/25 (%)
– – – – – – – – – – – – – – –
-0.2 Dow
-0.7 Nasdaq
-0.7 Nasdaq 100
-0.6 S&P 500
-0.2 S&P 400
-0.8 S&P 600
The headlines were spare, the volume was light, and the VIX looked like it was off birdwatching at pre-Liberation Day levels. After the best streak since Bush-era iPods, investors found themselves at a natural pause: part digestion, part nerves.
Trade talk was back to vague gesturing. President Trump hinted that tariff relief for China might arrive “at some point,” which, translated from politician to plain English, means somewhere between later and never. Elsewhere in trade, the White House rejected Japan’s request for a full exemption from retaliatory tariffs.
Hollywood got a fresh scare, too: the president floated 100% tariffs on foreign films, sending shares of Netflix (NFLX -1.9%), Disney (DIS -0.4%), Warner Bros. Discovery (WBD -2.0%), and Paramount (PARA -1.6%) down on fears of subtitles with price tags.
The ISM Services Index surprised to the upside, its best (thus worst) showing since February 2024. New orders surged, and prices rose again — not great news for those hoping inflation was bored of its comeback tour. The employment sub-index stayed in contraction territory for the second month, though slightly improved. So: more expensive stuff, fewer jobs to pay for it. A lesser-known verse in the hymn to greatness.
Earnings season is nearly out of ammo, with most themes priced in: stronger-than-feared Q1 results, soft Q2 guidance, and CEOs tossing up enough macro caveats to fill a private-jet hangar in Aspen.
The Fed meets Wednesday, but Chair Powell is expected to hold steady and say little. Except, perhaps, to remind everyone that tariff risks are about as welcome as a wasp in the punch bowl. Oh, and he’s still in charge of the central bank, and the Fed didn’t break this economy—it just works here.
Over at Berkshire Hathaway, Q1 operating earnings missed slightly thanks to California wildfire losses. That news was dwarfed by the bigger one: Warren Buffett will step down as CEO by year’s end. The succession plan remains in place, as do questions about what Berkshire looks like post-oracle. For now, BRK.B slipped just 0.3%, as if the market didn’t quite believe the GOAT would ever really leave.
If Monday had a mood, it was: “Don’t just do something, sit there.” After nine days of gains, that may be just what the doctor—or the central banker—ordered.
— Jason Kelly
_________________
You’re getting the mild analgesic. The full dose, including side effects and hallucinations, is for paid subscribers.
