New York, NY – May 6, 2025 – U.S. stock indices closed mixed on Monday as market participants remained cautious ahead of the Federal Reserve’s upcoming policy meeting. With no interest rate change expected this week, investor attention has turned to forward guidance, particularly the growing expectation for rate cuts beginning in June.
The Dow Jones Industrial Average gained 96.64 points (+0.23%), ending the session at 41,414. Meanwhile, the S&P 500 declined by 12.9 points (-0.23%) to 5,673, and the Nasdaq Composite dropped 54.21 points (-0.30%), closing at 17,923.
According to Jeffrey Roach, Chief Economist at LPL Financial, “The Fed is expected to maintain its current rate, but signs point to a softening stance. Current economic indicators suggest rate cuts may begin in June, with additional cuts likely in October and December if trends hold.”
Inflation Cooling and Energy Prices Declining
U.S. inflation, which currently sits at 2.39%, remains above the Federal Reserve’s 2% target but has declined for two consecutive months. The moderation in prices is partly attributed to easing energy costs following OPEC+’s announcement of a 411,000 barrel-per-day output increase set to begin June 1. Lower oil prices are expected to relieve pressure on consumer goods and services.
Tariff Tensions Escalate With Hollywood in the Crosshairs
Trade policy also rattled markets Monday as President Donald Trump announced plans to impose 100% tariffs on foreign-made films. The President cited concerns over international incentives luring U.S. studios abroad, calling the trend a “national security threat.”
The entertainment industry is expected to lobby against the move, fearing a ripple effect across global production partnerships and distribution networks.
Berkshire Hathaway Falls After Buffett Announces CEO Exit
Berkshire Hathaway experienced one of the day’s largest declines, sliding 4.33% on news that Warren Buffett will step down as CEO while remaining President of the Board. The leadership transition sparked investor concern, despite reassurances that the company’s long-term strategy remains intact.
Looking Ahead
Investors now await Wednesday’s Federal Open Market Committee (FOMC) statement and Chair Jerome Powell’s remarks for confirmation of the Fed’s shifting stance. With inflation slowing, energy prices dropping, and tariff uncertainty mounting, the upcoming summer months could see a redefined trajectory for both the economy and financial markets.
