Stock Market Live May 6: Spooked Investors Continue to Sell S&P 500 (VOO) After Win Streak Snaps
Key Points
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The S&P 500 is poised to open lower one day after Warren Buffett announced he will step down as Berkshire Hathaway CEO.
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President Trump meets with Canada’s new prime minister to discuss tariffs later today, and the Fed will make its next interest rate adjustment (or not) on Wednesday.
- Nvidia made early investors rich, but there is a new class of ‘Next Nvidia Stocks’ that could be even better; learn more here.
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Ladies and Gentlemen, We Have A New Streak
What goes up, must come down. After nine straight days of winning, the S&P 500 finally closed lower on Monday — and lower again today.
We now have back-to-back down days for the index and the Vanguard S&P 500 ETF, as both close down 0.8% today, and a new streak begins: a bad one.
Big Oil Keeps Doing What it Does Best
One segment of the economy that remains bullish is Big Oil. OilPrice.com reports this morning that despite OPEC planning now to increase oil production rates for the second time in two months, oil majors including Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) intend to keep investing in new projects and new production, with Kazakhstan being a primary focus.
That’s bad news for oil profits, most likely. But good news for consumers at the gas station.
Investors Are Nervous -- But Maybe Not Nervous Enough
The U.S. RCM/TIPP Economic Optimism index declined to 47.9 in May, ahead of Trump’s tariffs, marking the third straight month the index remained below 50, indicating pessimism among Americans. The index hit a 40-month high at 54 in December 2024. Investor confidence declined as well, but only to 60.4, and remains in positive territory.
Tariffs War Has Its First Winner: The UK
President Trump’s reciprocal tariffs have resulted in a first big tariffs treaty with India. Unfortunately for us, it’s a bilateral tariffs treaty between India and… the UK.
British exports to India will see tariffs halved on whiskey and gin, falling to 75%, and continuing to shrink. British cars exported to India will face not 100% tariffs, but just 10%. The countries expect their two-way trade to be “fully tariff-free within a decade.”
Tariffs Turbulence Ahead
This article will be updated throughout the day, so check back often for more daily updates.
The S&P 500 snapped an historic 9-day win-streak yesterday, closing down 0.6%, after investors were spooked by Warren Buffett’s announcement he will retire as CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) at the end of the year. In pre-market trading Tuesday, it appears we’re now beginning a new streak of the S&P 500 losing value.
In pre-market trading, both the S&P 500 index and the Vanguard S&P 500 ETF (NYSEMKT: VOO) that tracks it are down 0.8%.
In upcoming news, President Trump meets Canadian Prime Minister Mark Carney later today to discuss tariffs, and the Federal Reserve meets to discuss an interest rate cut Wednesday. Experts aren’t optimistic on either event, however, expecting no immediate tariffs relief for Canada, and predicting the Fed will hold rates steady.
Earnings
Earnings season continues to roll, with roughly 100 companies reporting earnings this morning.
S&P components Leidos (NYSE: LDOS) and Ball Corporation (NYSE: BALL) both reported earnings beats this morning, as did chemical diagnostics company Waters Corporation (NYSE: WAT), and hotel operator Marriott (Nasdaq: MAR). Nuclear power utility Constellation Energy Group (Nasdaq: CEG), however, barely missed its earnings number.
Analyst Calls
Despite the wins, analysts seem downbeat this morning. DZ Bank downgraded Chevron (NYSE: CVX) from “buy” to “sell” after yesterday’s report that OPEC is increasing oil production in June. Northcoast Research cut McDonalds (NYSE: MCD) to neutral. And CFRA downgraded insurer Cigna (NYSE: CI) to hold on concerns over “higher medical utilization including deferred pandemic care.”
Susquehanna, however, upgraded Canadian National Railway (NYSE: CNI) stock to positive.
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