More reassuring words from Treasury Secretary Scott Bessent about tariff negotiations provided some lift after a steep gap-down at Tuesday's opening bell.
But stocks posted losses for a second straight trading session as investors, traders and speculators still await substantive terms from the Trump administration amid ongoing talks with its global trading partners.
President Donald Trump welcomed Canadian Prime Minister Mark Carney to the White House on Tuesday afternoon, but little progress came from their discussion.
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"We don't need their Cars, we don't need their Energy, we don't need their Lumber, we don't need ANYTHING they have, other than their friendship," Trump posted on Truth Social prior to his meeting with Carney, "which hopefully we will always maintain. They, on the other hand, need EVERYTHING from us!"
Following his meeting with the prime minister, the president was asked what, if anything, Carney could say to get Trump to lift tariffs on Canada. The president said, "No, it's just the way it is."
Setting aside the potential for market-moving tariff-related news between now and then, investors, traders and speculators now await the Federal Open Market Committee and Fed Chair Jerome Powell.
Thirty-day fed funds futures prices reflect a 96.8% probability the Fed will hold interest rates at 4.25% to 4.50%, down from 98.6% on Monday.
Be sure to follow FOMC news and developments on our live Fed blog.
By the closing bell, the blue-chip Dow Jones Industrial Average was down 1.0% to 40,828, the broad-based S&P 500 had fallen 0.8% to 5,606, while the tech-heavy Nasdaq Composite was off 0.9% to 17,689.
Trade deficit hits all-time high
The Census Bureau and the Bureau of Economic Analysis said on Tuesday that the U.S. trade deficit expanded from $123.2 billion in February to $140.5 billion in March. Exports increased by 0.2% to $278.5 billion, while imports increased by 4.4% to $419.0 billion.
"The deficit in goods and services reached another historic record high in March as companies continued to increase imports in order to minimize the effects of tariffs," writes Raymond James Chief Economist Eugenio J. Alemán.
"The Trump administration's threat to impose tariffs on pharmaceutical imports pushed firms to increase pharmaceutical preparations by $20.9 billion in just one month," Alemán explains, underscoring "the distortionary effects of tariffs on the behavior of firms."
According to Aleman, "This larger-than-expected trade deficit will push GDP growth into further negative territory during the first quarter of the year."
Constellation leads
Constellation Energy Group (CEG) sank in pre-market trading after it reported below-consensus first-quarter earnings of $2.14 per share but soared after the opening bell on management's reaffirmation of full-year guidance.
The utility stock – a great way to invest in the nuclear revolution – was the top performer in the S&P 500 on Tuesday with a gain of 10.3%.
Constellation said full-year EPS would be $8.90 to $9.60, above a Wall Street estimate of $9.44. The largest producer of clean energy in the U.S. continues to benefit from the ongoing AI infrastructure buildout.
"As presidents Trump and Biden repeatedly have emphasized, it is vital for our national security and for our economy that America lead the AI race," Constellation CEO Joe Dominguez said in a statement, "and I am so proud that Constellation is playing such an important role."
Constellation's nuclear power fleet produced 45,582 gigawatt-hours in the first quarter of 2025, up from 45,391 GWhs a year ago. Management expects demand to remain strong, supported by particular needs for power emerging among large players in the technology sector.
"The short story here is that we're seeing a very, very favorable environment," Dominguez said, citing recent updates from big tech companies, "where they've essentially doubled down on their capital and growth strategies" and have reinforced "Constellation's overall strategic plan."
Palantir lags
Palantir Technologies (PLTR), the most expensive stock in the S&P 500 based on price-to-sales ratio, declined by 12.1% on Tuesday after the company beat analyst expectations for its first quarter and raised its full-year guidance.
The AI stock reported first-quarter earnings of 13 cents per share, in line with the consensus forecast, on revenue of $884 million, ahead of an $862 million estimate.
"We are delivering the operating system for the modern enterprise in the era of AI," said CEO Alexander C. Karp. "Consequently, we are raising our full-year guidance for total revenue growth to 36% and our guidance for U.S. commercial revenue growth to 68%."
Through Monday, PLTR stock had defied the broader trend in 2025 and had posted a total return of 67.3% year to date. The S&P 500, meanwhile, had shed 3.5% during the same time frame.
Morgan Stanley Research analyst Sanjit Singh writes in a May 6 note that Palantir "continues to prove out that it is one of the clear AI winners in software."
Singh cites "accelerating top-line growth" of 30%-plus as well as revenue growth plus operating margin of 83%.
"While this represents elite-level performance in software," Singh concludes, "the current valuation of approximately 95x 2027 free cash flow makes underwriting a return on Palantir shares extremely challenging."
Singh maintains an Equal Weight (or "Hold") rating on PLTR stock with a 12-month target price of $98.
Berkshire bounces back
Berkshire Hathaway (BRK.B) was back in positive territory on Tuesday, rising 0.01% a day after the Warren Buffett stock fell 5.1%.
On Saturday, the 94-year-old Oracle of Omaha announced he'll step back from some of his responsibilities at the end of this year. On January 1, 2026, he'll hand off the CEO title to Greg Abel and then will serve only as chairman of the Berkshire Hathaway board of directors.
Of course, one of the most compelling statistics documenting Buffett's long-term success is Berkshire's 5,502,284% total return since 1965 vs 39,054% for the S&P 500 during the same time frame.
That kind of outperformance means BRK.B could fall 99% from here and still be ahead of the index on a price-appreciation-plus-dividends basis.
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