S&P500 Forecast: SPX falls on trade concerns, FOMC meeting begins

U.S. stocks are set to open lower on Tuesday after President Trump's plan to impose further trade tariffs dampened investor sentiment. The Federal Reserve's two-day meeting also kicks off today ahead of tomorrow's rate decision. The Fed is expected to leave rates unchanged at 4.25%- 4.5% and wait for further clues over the impact of trade tariffs on the economy.

Stocks fall on tariff concerns as the FOMC meeting begins

U.S. stocks are set to open lower on Tuesday after President Trump's plan to impose further trade tariffs dampened investor sentiment. The Federal Reserve's two-day meeting also kicks off today ahead of tomorrow's rate decision.

Trump said on Monday he would announce farmer tariffs over the next two weeks. His latest announcement follows his announcement on Sunday that he would impose tariffs on foreign-made movies.

Drugmakers Eli Lilly and Pfizer were slightly lower premarket following the latest developments, which offset optimism surrounding deregulation towards approval for opening pharmaceutical manufacturing plants.

Tariff-driven uncertainty is resulting in consumers, businesses, and the Federal Reserve adopting a wait-and-see approach to understand the outlook. While Trump said last week that potential deals with trading partners were making progress, the lack of concrete results is unnerving investors.

The Fed starts its two-day meeting on Tuesday, and the central bank is expected to leave interest rates unchanged. Policymakers' comments regarding any clues to their stance going forward will be closely monitored. With stable inflation and steady jobs data, the Fed will stay on the sidelines for now. The market is pricing in the first rate cut in July and 79 basis points of cuts by the end of the year.