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The rally's overat least for now. After nine straight days of gains, the S&P 500 (SPY) finally exhaled, falling 0.54% at 10.25am today, alongside a 0.8% drop in the Nasdaq (NASDAQ:QQQ) and a 0.5% slide in the Dow (DIA). Blame it on weak earnings, fading tariff optimism, and a market priced for perfection. Goldman Sachs is warning there's little headroom left, and JPMorgan's message is even colder: U.S. stocks are no longer a safe place to hide. Traders are already shifting gears, with options markets showing a rush toward downside protection instead of upside dreams.
Among the biggest movers? Ford (NYSE:F) warned tariffs could wipe out $1.5 billion in adjusted EBIT by 2025, sending the stock lower. Tesla (NASDAQ:TSLA) dropped 2% after UK registrations in April cratered 62% year-over-yeardespite a shiny new Model 3 rollout. Palantir disappointed with earnings. Marriott (NASDAQ:MAR) cut its growth forecast and lost 3%. And DoorDash made waves with a $1.2 billion SevenRooms buyoutjust hours after confirming it's also swallowing Deliveroo. In short: no one's in the mood for aggressive expansion stories unless the numbers back it up.
Now all eyes turn to the Fed. BNP Paribas is urging traders to hedge small-caps ahead of what could be a volatile weekbetween Wednesday's FOMC decision and the potential expiration of tariff pauses. Rate cut bets are getting scaled back fast as recent economic data comes in stronger than expected. But with fiscal policy in limbo and corporate profits cracking, doing nothing and saying less might be the smartest move the Fed can make right now.
This article first appeared on GuruFocus.