Wednesday Afternoon Coffee - Markets Update - 7 May 2025 - Markets Mixed as Fed Holds Rates Steady; Dollar Firms and Commodities Diverge

The Trade Academy Team
3 days ago
2 min read

Markets Update: U.S. stocks closed mixed Wednesday as the Federal Reserve left interest rates unchanged, acknowledging rising risks of both inflation and unemployment, while global markets and commodities responded cautiously to ongoing trade tensions and uncertain economic signals.

Global Markets Roundup: 7 May 2025

Fed Holds Steady Amid Heightened Risks

In a widely expected decision, the Federal Reserve maintained its benchmark rate in the 4.25%-4.50% range. However, policymakers flagged increased risks to both inflation and employment, warning of a murkier economic outlook amid escalating trade conflicts sparked by the Trump administration's 145% tariff stance.

Choppy Session as Dow Rises, Tech Weighs on Nasdaq

Trading was volatile throughout the day, with early optimism fueled by news that U.S. and Chinese negotiators plan to meet over the weekend in Switzerland for preliminary trade talks. However, markets retreated after President Trump ruled out reversing the tariff hikes, briefly pulling the Nasdaq down over 1%.

The Dow Jones Industrial Average gained 132.90 points, or 0.33%, closing at a record 40,961.90, driven by a 10% surge in Walt Disney shares after stronger-than-expected streaming results. S&P 500: -11.46 points (-0.20%) to 5,595.45Nasdaq Composite: -119.54 points (-0.68%) to 17,568.94

Alphabet sank over 8%, dragging the S&P 500’s communication services sector down 2.4%, the day’s worst performer. Apple fell 2% following reports it may integrate AI search into its browser. Uber dropped 2.1% after missing revenue expectations, while CrowdStrike tumbled 5.3% on job cut plans despite reaffirming long-term forecasts.

European Markets Slide

Germany’s DAX Index fell 134 points, or 0.57%, with pressure from Sartorius (-3.12%), Zalando (-3.02%), and Siemens Energy (-2.66%). Gains in Fresenius Medical (3.90%), Infineon (2.76%), and Porsche AG (2.71%) helped limit losses.

Dollar Gains as Fed Stays Hawkish

The U.S. dollar strengthened post-decision, with investors interpreting the Fed’s tone as more hawkish than expected. Dollar Index DXY: +0.26% to 101.02. USDJPY: +0.55% to 143.19. EURUSD: -0.37% to $1.0734.

Oil Slips on Supply Concerns; Gold Steadies

Crude prices declined despite optimism over potential trade de-escalation:

WTI Crude (CL1!): -$1.05 to $58.04/barrelBrent Crude (BRN1!): -$1.06 to $61.09/barrel

Gold pared early losses and hovered near record levels as investors sought safety amid macro uncertainty: Spot Gold: $3,395.12 per ounce, just below the $3,400 mark.

Cocoa Climbs, Grains Diverge

Cocoa futures surged past $9,100 per tonne, their highest since April 25, as traders watched mid-crop conditions in West Africa. Soybeans (ZS1!): Unchanged at $10.41¼/bushel. Corn (ZC1!): -4¼ cents to $4.51¼/bushel (lowest since April 4). Wheat (ZW1!): -½ cent to $5.35½/bushel.

Outlook

Markets remain at the mercy of trade headlines and central bank messaging. With economic clarity elusive and the Fed signaling caution, investors are expected to stay defensive heading into the next round of U.S.-China negotiations.

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