Wall Street opens lower ahead of Federal Reserve meeting, led by tech stocks

Wall Street opened lower for a second consecutive day on Tuesday, with technology stocks leading the decline. The S&P 500 dropped 0.7 per cent, ending its nine-day positive streak. The Dow Jones Industrial Average fell 255 points (0.6 per cent), while the Nasdaq composite declined 1 per cent. This drop coincided with the start of the Federal Reserve's two-day meeting, where officials are expected to keep interest rates unchanged. The Fed had implemented three rate cuts last year, but concerns about potential inflation, influenced by uncertainty surrounding President Donald Trump's tariffs, remain. "Traders appear to be taking profits and moving to the sidelines ahead of the Federal Reserve's FOMC meeting," said David Morrison, senior market analyst at Trade Nation.Analysts anticipate the Fed will hold its benchmark interest rate steady for the third consecutive meeting, following three cuts in 2024. Despite a marginal inflation rate above the Fed's 2 per cent target, officials remain wary of rising prices amid trade policy uncertainties. The US economy contracted by 0.3 per cent in the first quarter, marking its first decline in three years. This, combined with market volatility from White House tariff announcements, led to the end of Wall Street's nine-day growth streak, its longest since 2004. Meanwhile, several American corporations have pulled back on financial guidance due to tariff-related uncertainties. Ford Motor Co. shares fell 2.5 per cent in pre-market trading after the company announced a $1.5 billion reduction in operating profit due to tariffs. General Motors also adjusted its 2025 guidance, citing a potential $5 billion impact from tariffs. Clorox shares dropped 3.2 per cent after missing quarterly targets and lowering forecasts due to "macroeconomic uncertainty." Meanwhile, DoorDash saw its shares decline over 5 per cent after acquiring UK-based food delivery service Deliveroo for £2.9 billion ($3.9 billion), expanding into Europe, Asia, and the Middle East. In global markets, oil prices rebounded by over 2 per cent following a sharp drop due to OPEC+'s decision to increase output by 411,000 barrels per day in June. Despite concerns over a potential global economic slowdown, oil prices showed resilience. In Europe, Frankfurt's stock market fell 0.7 per cent after German conservative leader Friedrich Merz lost the first vote for chancellor. Paris dipped 0.4 per cent, while London remained flat in afternoon trading. Asian markets saw some optimism as governments made progress on agreements aimed at easing the impact of Trump’s tariffs. US Treasury Secretary Scott Bessent indicated that the Trump administration had received "very good" trade proposals from 17 countries and that substantial progress could be made with China in the coming weeks, despite its 145 per cent tariff. In company news, Vestas, the Danish wind turbine maker, saw its shares rise 9.3 per cent after sticking to its earnings forecasts despite geopolitical uncertainties. Ford's stock dipped 0.3 per cent after it forecast a $1.5 billion hit to adjusted operating earnings due to tariffs. However, Ford’s first-quarter net profit of $471 million exceeded analyst expectations.