Wall Street loses ground, breaking a 9-day winning streak, and crude oil
prices tumble
[May 06, 2025] By
DAMIAN J. TROISE
NEW YORK (AP) — Stocks closed lower on Wall Street Monday, breaking a
nine-day winning streak, as oil prices hit a four-year low after the
OPEC+ group announced plans to increase output.
The losses came amid a relatively calm day of mostly mixed trading. They
follow several weeks of gains that helped the market wipe away its
losses since the ongoing trade war began.
The S&P 500 fell 36.29 points, or 0.6%, to 5,650.38. The decline broke
the benchmark index's longest winning streak since 2004.
The Dow Jones Industrial Average fell 98.60 points, or 0.2%, to
41,218.83. The Nasdaq composite fell 133.49 points, or 0.7%, to
17,844.24.
Technology companies and other big stocks were among the heaviest
weights on the market. Apple slumped 3.1%, while Amazon fell 1.9% and
Tesla slipped 2.4%.
Berkshire Hathaway fell 5.1%. Legendary investor Warren Buffett
announced over the weekend that he would step down as CEO by the end of
the year after six decades at the helm. Buffett will still be chairman
of the board of directors.
The OPEC+ group of eight oil producing nations announced over the
weekend that it will raise its output by 411,000 barrels per day as of
June 1.
U.S. crude oil prices fell 2% to $57.13 per barrel. Many producers can
no longer turn a profit once oil falls below $60. Prices are down
sharply for the year over worries about an economic slowdown. The energy
sector led the losses within the S&P 500. Exxon Mobil shed 2.8%.
Markets have been absorbing the shock of tariffs and the growing trade
war. President Donald Trump has imposed import taxes on a wide range of
imports, prompting retaliation from global trading partners. Many of the
more severe tariffs that were supposed to go into effect in April were
delayed by three months, with the notable exception of tariffs against
China.
The delays have provided some relief to Wall Street, though uncertainty
about the impact from current and future tariffs continues to hang over
markets and the economy.
“Uncertainty remains elevated and economic data will likely weaken in
the coming months, meaning further bouts of volatility are likely," said
Ulrike Hoffmann-Burchardi, chief investment officer of global equities
at UBS Global Wealth Management.
That uncertainty will overshadow the Federal Reserve’s meeting this
week.
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Trader Patrick Casey, left, works on the floor of the New York Stock
Exchange, Monday, May 5, 2025. (AP Photo/Richard Drew)
The Fed is expected to hold its benchmark interest rate steady on
Wednesday. It cut the rate three times in 2024 before taking a more
cautious stance. The central bank was concerned that inflation, while
easing, was still stubbornly hovering just above its target rate of 2%.
Concerns about inflation reigniting have only grown amid the global
trade war sparked by Trump’s tariff policy.
The economy has shown some signs that it is feeling the impact from
tariffs and the uncertainty over Trump's policy. The U.S. economy shrank
0.3% in the first quarter, marking the first drop in three years.
The economy is still showing signs of resilience, however. Consumers
have grown more cautious, but still continue to spend. Economic activity
in the services sector continued expanding in April, according to a
survey from the Institute for Supply Management.
The services sector survey and the latest consumer confidence updates
also reflect growing concerns over the economy's direction. Trump’s
rapidly shifting policies on trade have kept the Fed and markets on
edge.
Tariffs have been imposed, only to be pulled or delayed, sometimes on a
daily basis. The on-again-off-again approach has left businesses,
households and economists at a loss in trying to forecast where the
economy might be headed and planning accordingly.
The latest salvo in the trade war from Trump came Sunday night in a post
on his Truth Social platform. He said he has authorized a 100% tariff on
movies that are produced outside of the U.S. The impact is unclear, as
it is common for films to include production at multiple locations
around the world.
Netflix slumped 1.9% and Warner Bros. Discovery fell 2%.
Shoemakers posted gains following the announcement that Skechers is
being acquired for $9 billion and taken private by the investment firm
by 3G Capital.
Skechers jumped 24.3%, while Crocs rose 3.4%. Deckers Outdoor, which
owns the Ugg and Teva brands, rose 1.2%.
Treasury yields rose. The yield on the 10-year Treasury rose to 4.35%
from 4.31% late Friday.
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AP business writers Jiang Junzhe and Matt Ott contributed to this story.
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