Tuesday Afternoon Coffee - Markets Update - 6 May 2025 - Markets Dip Ahead of Fed Decision; Oil Rebounds Sharply as Dollar Weakens

The Trade Academy Team
May 6
3 min read

Markets Update: U.S. and global equities slipped Tuesday as investors braced for Wednesday's Federal Reserve policy decision and grew increasingly impatient with the lack of progress on U.S. trade agreements. Meanwhile, the dollar extended recent losses and oil prices bounced back after Monday’s steep decline.

Global Markets Roundup: 6 May 2025

Stocks Decline on Trade Anxiety, Fed in Focus

Markets remained under pressure as uncertainty over U.S. trade direction and a lack of concrete deal announcements weighed on sentiment. The Dow Jones Industrial Average fell 143.66 points, or 0.35%, to 41,075.17. The S&P 500 dropped 17.40 points, or 0.31%, to 5,632.98, while the Nasdaq Composite slipped 83.59 points, or 0.47%, to 17,760.40.

MSCI’s global equities index edged down 0.16% to 844.82, despite recovering slightly following political developments in Germany. Conservative leader Friedrich Merz was elected chancellor in a second round of parliamentary voting, reversing an earlier defeat.

Germany’s DAX index pared some losses after the vote but still ended the day 0.5% lower.

Investors remained fixated on trade rhetoric from Washington and Beijing. President Donald Trump said talks with multiple nations, including China, were ongoing, yet the absence of specific trade agreements has turned sentiment increasingly cautious.

Fed Set for Steady Rates, Hawkish Language Expected

The Federal Reserve began its two-day policy meeting Tuesday, with expectations it will hold interest rates steady. Investors will watch closely for signals on how the central bank plans to navigate persistent trade uncertainty.

Treasury yields were mixed in subdued trading. The 10-year yield edged up to 4.355%, while the 30-year yield climbed to 4.8643%. In contrast, the 2-year yield, more sensitive to Fed expectations, fell to 3.795%.

Dollar Sinks, Euro and Yen Gain

The U.S. dollar weakened further, continuing a slide triggered by erratic trade policies and global repositioning away from U.S. assets. The dollar index DXY fell 0.38% to 99.43. The euro EURUSD rose 0.27% to $1.1346, and the dollar slipped 0.6% against the yen USDJPY to 142.84. Sterling advanced 0.56% to $1.3366, bolstered by news of a long-awaited U.K.-India trade pact. Canada’s loonie gained 0.35% to C$1.38 per dollar, while the dollar strengthened slightly against the Swiss franc, up 0.22% to 0.824.

Oil Rebounds; Gold Hits Two-Week High

Oil prices surged more than 4%, recovering from Monday’s sharp drop after OPEC+ announced plans to increase output. Bargain hunting and technical support lifted prices, though supply concerns linger.

WTI Crude (CL1!): +4.31% to $59.59/barrel, Brent Crude (BRN1!): +3.97% to $62.62/barrel.

Gold extended gains, supported by Chinese post-holiday demand and worries over potential U.S. tariffs on pharmaceutical imports. Spot gold: +1.89% to $3,396.70/oz U.S. gold futures: +2.49% to $3,393.60/oz.

Commodities Mixed, Grains Rise

Cotton fell to a four-week low at 63.79 USd/Lbs, while Arabica coffee traded near $4/lb amid tight supplies. Cocoa futures eased to $8,800/tonne after recent highs on easing West African supply fears. Grains mostly advanced: Corn (ZC1!): +1¼ cents to $4.55½/bushel, Wheat (ZW1!): +4¾ cents to $5.36/bushel, Soybeans (ZS1!): -4¼ cents to $10.41¼/bushel.

Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team