S&P 500 and Dow Jones: Stocks Slip as Fed Minutes and Tariff Concerns Weigh on Markets

Stocks Pull Back Mid-Session as Materials and Industrials Weigh on Markets

Stocks traded lower Wednesday afternoon after the S&P 500 hit a record high on Tuesday. Traders reacted to tariff concerns and awaited the Federal Reserve’s meeting minutes, leading to modest declines across major indexes.

The S&P 500 slipped 0.02%, while the Nasdaq Composite lost 0.12%. The Dow Jones Industrial Average dropped 116 points, or 0.26%. Materials and industrials dragged on the market, while energy stocks provided some support.

Materials and Industrials Slide as Energy Stocks Outperform

The materials sector was the biggest laggard, dropping 1.25%, weighed down by declines in Sherwin-Williams and Celanese Corp. Industrials also traded lower, with J.B. Hunt Transport and Norfolk Southern slipping over 3%. Financials and consumer discretionary stocks saw modest losses, while real estate and communication services dipped slightly.

Energy stocks outperformed, rising 1.12% as oil prices remained firm. Devon Energy surged over 10%, while Occidental Petroleum gained nearly 6%. Health care stocks also showed strength, climbing 0.92% behind gains in pharmaceuticals and biotech names.

Trump’s Tariff Threats Keep Traders on Edge

Trade policy concerns resurfaced after former President Donald Trump suggested a potential 25% tariff on imported autos, semiconductors, and pharmaceuticals. Trump did not specify if the tariffs would be broad or targeted but stated they could take effect as soon as April 2.

This uncertainty weighed on semiconductor stocks, with Cadence Design Systems and Synopsys falling over 6%. Investors remain cautious about how potential trade restrictions could impact corporate earnings and supply chains.

Fed Minutes Loom as Investors Watch for Inflation Signals

Markets are bracing for the Federal Reserve’s meeting minutes, set for release at 19:00 GMT. The central bank held interest rates steady but expressed concerns over inflation. Traders will be looking for any hints on future rate adjustments, which could influence sentiment in rate-sensitive sectors like real estate and financials.

Declining Treasury yields have already fueled a rotation into smaller-cap stocks, according to Piper Sandler’s Craig Johnson, who noted that weakening crude oil and a pullback in the U.S. dollar could further impact sector trends.

Top Gainers and Losers: Garmin Soars, Celanese Plunges

Garmin Ltd. surged 12.4% after reporting strong earnings, while Devon Energy jumped 10.6% on oil strength. Charles River Laboratories, Occidental Petroleum, and Super Micro Computer all saw gains above 5%.

On the downside, Celanese Corp collapsed 21.9% following weak guidance. Cadence Design Systems and Axon Enterprise each dropped over 7%. Intel slid 5.4%, while Arista Networks and Synopsys posted notable losses.

What’s Next for Markets?

Investors will analyze the Fed minutes for signs of future rate policy shifts. Any hawkish tone could pressure equities, while hints of a dovish stance may provide relief. Additionally, traders are closely watching trade developments, as uncertainty over potential tariffs continues to drive market sentiment.

More Information in our Economic Calendar.