EARN25

Tariff Tensions, Fed Warnings Spark Market Volatility

Mixed economic data and a cautious Federal Reserve weighed on sentiment

Deputy Editor
May 9, 2025 at 12:42 PM
facebook X logo linkedin


Renewed trade tensions, mixed economic signals, and a cautious Federal Reserve kept Wall Street on edge this week. The central bank held rates steady as anticipated, and Fed Chair Jerome Powell warned of potential slowdowns tied to rising prices and tariff-related pressures. Economic data added to the uncertainty, with the ISM services index climbing, but the S&P Global U.S. services purchasing managers' index (PMI) falling to a multi-year low.

Investors also monitored a widening U.S. trade deficit and new tariffs on foreign-made films, which pressured the entertainment sector. The Nasdaq Composite (IXIC) charged toward 18,000 and the Cboe Volatility Index (VIX) to its lowest close in over a month, but Wall Street is still eyeing its first weekly loss in three.

Beyond Big Tech -- EVs, Chips, and Quantum

While Big Tech earnings dominated headlines last week, this round of results offered a broader look at the sector. Palantir Technologies (PLTR) stock fell despite a revenue win and lifted full-year outlook, as traders focused on modest growth, European weakness, and valuation concerns. In the semiconductor spaceAdvanced Micro Devices (AMD) impressed with a strong quarter and bullish guidance, while Super Micro Computer (SMCI) stumbled on a miss and weak forecast.

In the world of electric vehicles (EV), Rivian Automotive (RIVN) and Lucid Group (LCID) offered mixed results, but their updates lifted sentiment across the sector, boosting Tesla (TSLA). Meanwhile, D-Wave Quantum (QBTS) and IONQ (IONQ) rallied after smaller-than-expected losses and revenue beats. Lyft (LYFT) surged after boosting its share buyback program, brushing off a revenue miss on the back of double-digit growth in rides, bookings, and active riders.

Corporate Shifts and Tariff Tensions

Berkshire Hathaway (BRK.B) slid after Warren Buffett announced plans to step down as CEO by the end of the year, and the company reported weaker-than-expected earnings. Alphabet (GOOGL) also tumbled after Apple’s (AAPL) Eddy Cue testified that artificial intelligence (AI) could replace traditional search engines. Meanwhile, new tariffs on foreign films pressured Netflix (NFLX), Disney (DIS), and Warner Bros  (WBD), but semiconductors rebounded despite the ongoing tariff turmoil, with the VanEck Semiconductor ETF (SMH) reclaiming a key technical level.

What to Watch Next Week

Next week’s focus turns squarely to inflation, as the consumer price index (CPI) and  producer price index (PPI) hit the tape -- releases that could reshape expectations for the Fed’s next move. Earnings season continues, with results from Alibaba (BABA), Deere (DE), and Walmart (WMT) among the highlights. Meanwhile, Schaeffer's Senior V.P. of Research Todd Salamone highlights some potential upside for the SPX, while Senior Quantitative Analyst Rocky White breaks down what a bullish outside day means for traders.

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!