Stocks Start Week Gloomier; Nine-day Streak Ended as Fed Prepares to Do Nothing on Interest Rates; Stock and Oil Futures Lower; Gold, Silver Bid

The first full week of May began with some sobering news after stocks had risen steadily - the Dow and s&P up nine straight sessions - that brought markets back to earth at the open.

Tyson Foods (TSN) released fiscal second quarter results prior to the bell and warned that it faced a challenging environment, especially in beef products. The stock rook a nosedive right out of the gate and finished the day down 7.75%.

Berkshire-Hathaway's (BRK.B) founder and legendary stock-picker, Warren Buffett, announced he would step down as CEO at the end of the year, naming Greg Abel as his replacement. The board voted unanimously to promote Abel to the CEO position and to keep Buffett, 94, as Chairman. The news came as a shock to shareholders and sent shares tumbling five percent on the day, just one session removed from making an all-time high (540.92).

Buffett's departure is seen as the end of an era for the vast holding company Buffett built. His acumen in the market and uncanny ability to find and acquire top-performing companies are unrivaled in the investing universe and shareholders are likely to be correct in their assessment of the situation that nobody will produce the kinds of returns Buffett has over the past 60 years.

Adding to the downbeat mood, Foot Locker (FL), a major retailer of sneakers and athletic footwear, closed at $13/share on Friday and tumbled to a close of $12.04 Monday, down 44% year-to-date. The company, which has already suffered a net loss ove the past four quarters, is under pressure to produce profits in a sector that is expected to be adversely affected by tariffs. Shares closed down seven percent on Monday.

Looking forward to Tuesday's session, investors are eyeing more earnings.

Reporting after Monday's closing bell, Palantir (PLTR) reported a strong quarter but investors are apparently choosing to take profits as the stock price has risen nearly 400% over the past year. Shares are trending eight percent lower in pre-market activity.

Ford (F) pulled its forward guidance and warned that the company would take a $1.5-2.5 billion hit from President Trump's tariffs. Shares are down more than two percent before the bell. Stock of the iconic American car manufacturer is trading around $10 per share.

Tuesday morning, Marriott (MAR) provided some hope at least in the hospitality space. Shares of the international hotelier are trending two percent higher as the company topped Wall Street estimates of $2.27 per share by posting adjusted EPS of $2.32.

Ag giant Archer Daniels Midland (ADM) topped estimates of $0.68 per share with adjusted earnings of $0.70, though the company faces a challenging environment with operations in the Ag Services & Oilseeds segment, a significant contributor to ADM's revenue, seeing a 52% decrease in operating profit due to tariff and trade policy uncertainties. Shares are modestly higher in pre-market trading.

Oil was smacked lower Monday as OPEC+ announced another round of production increases. The rising production quotas are seen by analysts as punishment meted out by Saudi Arabia, the bloc's largest producer, to other members of the cartel for not adhering to lower quotas over the past year. The Saudi's can handle lower producer prices while many of their counterparts will struggle economically.

Whatever the condition or purpose of the call for increased production, it comes at a particularly sensitive time, as tariff worries confound countries and economies already seeing signs of recession, especially in Europe. The price of WTI crude dipped as low as $55.93 Monday. It has since recovered to trade above $58, though it is unlikely to hold that level, already a four-year low.

While lower oil prices should serve as a boon to businesses relying on energy and consumers who fuel their vehicles, the overall impact is seen as yet another sign of global retrenchment.

At the same time, gold has rebounded sharply after dropping to a low of $3,222 last week. The price per ounce is up more than $140 from Friday's close. Silver has also risen, up more than $1 from its close of $32.18 last week to a high of $33.35 Tuesday morning.

The crypto space is under pressure this morning, with bitcoin falling below $93,000 for the first time in over a week after hitting an interim high above $97,000 just a few days ago.

With less than an hour until the opeing bell, stock futures are sharply lower. Dow: -304; NASDAQ, -245; S&P, -51.

As the Dow gained more than 3,000 points and the S&P more than 525 since April 21, stocks have once again become rather frothy, despite little easing of global trade and tariff tension.

The Federal Reserve begins its two-day FOMC meeting today and announces policy - expected unchanged with the federal funds target rate at 4.25-4.50% - Wednesday at 2:00 pm ET. Apparently, the stock-loving community isn't waiting around to hear Chairman Powell opine on how the Fed is data-driven and sees market dynamics as evenly balanced. Many Fed watchers 0 including President Trump - have grown impatient awaiting their promised rate cuts, which have stagnated since a one percent rip lower from the September, November, and December 2024 meetings.

The markets are moving on without the Fed, which is probably a condition that should have occurred earlier in the business cycle. Increasingly isolated by Trump’s fiscal re-tooling, the Fed continues to suffer from lack of public confidence in its ability to affect positive economic outcomes. Good riddance.

At the Close, Monday, May 5, 2025:
Dow: 41,218.83, -98.60 (-0.24%)
NASDAQ: 17,844.24, -133.49 (-0.74%)
S&P 500: 5,650.38, -36.29 (-0.64%)
NYSE Composite: 19,303.23, -83.44 (-0.43%)