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Berkshire Hathaway ( BRK/A ) falls after Buffett to step down as CEO
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US service sector picks up in April
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Skechers jumps after $9 billion take-private deal
(Updates to US market close)
By Chuck Mikolajczak
NEW YORK, May 5 (Reuters) - The S&P 500 fell to snap its
longest streak of gains in 20 years on Monday as investors
assessed U.S. President Donald Trump's latest tariff
announcement ahead of the Federal Reserve's monetary policy
decision later this week.
On Sunday, Trump announced a 100% tariff on movies produced
outside the U.S. but provided no details on how such levies
would be implemented.
Stocks have been volatile since Trump announced his first
round of tariffs on April 2, with the S&P 500 initially dropping
nearly 15%, only to stabilize and climb for the last nine
straight sessions, its longest streak since 2004.
On Monday, Treasury Secretary Scott Bessent said Trump's
tariff, tax-cut and deregulation agenda would work together to
drive long-term investment to the U.S., adding markets could
overcome any short-term turbulence.
"Nine up days in the S&P 500 is hard to maintain," said
Art Hogan, chief market strategist at B Riley Wealth in Boston.
"We are starting to price in that eventuality of deals
being announced, but we're running out of daylight on that
because every week that goes by that we don't start cutting
deals we're doing economic damage."
According to preliminary data, the S&P 500
lost 35.47 points, or 0.62%, to end at 5,651.20 points,
while the Nasdaq Composite lost 138.72 points, or 0.73%,
to 17,839.01. The Dow Jones Industrial Average
fell 102.10 points, or 0.25%, to 41,215.33.
Several movie and television production stocks fell
sharply right after Trump's announcement, but subsequently pared
losses.
Netflix ( NFLX ) fell to snap an 11-session winning streak,
while Amazon.com ( AMZN ) and Paramount Global ( PARAA ) were
also weaker.
Energy was the worst performer of the 11 major S&P
sectors, after OPEC+ decided to speed up its output hikes,
causing concerns about more supply as demand remains uncertain.
Class B shares of Berkshire Hathaway ( BRK/A ) declined
after Warren Buffett said he will step down as CEO of the
conglomerate.
On the economic front, the Institute for Supply Management
survey showed the services sector's growth picked up in April,
while a measure of prices paid by businesses for materials and
services raced to the highest level in more than two years,
indicating tariffs were causing inflation pressures to build.
Investors will closely eye the Fed's policy announcement on
Wednesday, in which the central bank is largely expected to keep
interest rates unchanged. Commentary from Fed Chair Jerome
Powell will be scrutinized for signs of when the Fed will adjust
monetary policy.
Markets are pricing in about 75 basis points of rate cuts by
the Fed for 2025, with the first easing of at least 25 basis
points likely at the central bank's July meeting, according to
LSEG data.
Investors are also concerned about how tariffs may affect
corporate profitability. Tyson Foods ( TSN ) tumbled after the
meat packer missed quarterly revenue expectations.
However, Skechers surged after the footwear maker
agreed to be taken private by 3G Capital in a $9.4 billion deal.