By Teresa Rivas | Monday, May 5

Hello Tariffs My Old Friend...Trump has come to talk about you again. A social media post over the weekend threatening 100% tariffs on movies that were produced outside the U.S. was enough to break the S&P 500's nine-day winning streak. 

The Dow Jones Industrial Average fell 99 points, or 0.2%, while the S&P 500 lost 0.6% and the Nasdaq Composite slipped 0.7%. 

It’s another fairly packed week in terms of earnings reports, but there weren’t many market moving names out on Monday. Weak demand overshadowed strong results at On Semiconductor; Tyson Foods’ revenue miss sank the stock; and a surprise deal to go private led Skechers to soar. But otherwise investors were mostly looking ahead to news later in the week. 

There will be results from Walt Disney, Uber Technologies, Advanced Micro Devices, AB InBev and more.

Investors have begun to breathe a sign of relief about the first-quarter reporting season, particularly around tech companies.  

“... I think it's been, overall, better-than-expected advertising revenues, and we've seen full-year outlooks either reiterated or, in some cases, even slightly improved,” writes Gabelli Funds Portfolio Manager Hanna Howard. “Companies are still cautioning that the environment remains uncertain, and some aren’t providing revenue outlooks. But based on the trends they’ve seen to date, ordering patterns have continued, and there’s a cautiously optimistic tone that things haven’t taken a significant turn for the worse.”

This week also brings the Federal Open Market Committee’s monetary policy meeting that wraps up Wednesday; there’s almost no chance of an interest rate cut. Odds of a June rate cut have also been falling.

“If [Fed Chairman Jerome] Powell were to focus on the data then the stage could be set for more dovish rhetoric and a potential cut. If Powell continues to talk about uncertainty due to tariffs and their potential inflationary impact, then the thought of cuts could remain just a hope and not a potential reality,” notes Jay Woods, chief global strategist at Freedom Capital Markets.

DJIA: -0.24% to 41,218.83
S&P 500: -0.64% to 5,650.38
Nasdaq: -0.74% to 17,844.24

The Hot Stock: GoDaddy +3.4%
The Biggest Loser: Zimmer Biomet Holdings -11.6%

Best Sector: Communication Services +0.2%
Worst Sector: Energy -1.8%

End of an Era

Berkshire Hathaway shares fell on Monday after legendary investor Warren Buffett said he would step down as chief executive officer after six decades at the helm, passing the baton to Greg Abel. 

At age 94, Buffett has certainly earned the right to take a step back, but it’s not as if anyone at Berkshire will be able to match his star power. He’s an Oracle, an international soda model, and the namesake of a bridge trophy. The one and only time I drove through Nebraska I kept myself awake by scanning every car for a THRIFTY license plate.

In short, shareholders have to decide if lightning can strike twice at Berkshire; or perhaps more prosaically, if the magic really does come down to a formula and hard numbers, or if there was some intangible extra he contributed. 

My colleague Andrew Bary has covered Buffett for years and has more:

Buffett will remain chairman of the company, Berkshire Hathaway said early Monday. It had been unclear after Buffett’s weekend announcement whether he would remain chairman. Buffett, 94, has led Berkshire since 1965. Buffett said at the meeting that he envisioned having an informal role at Berkshire, starting in 2026 as an advisor to Abel, when needed.

Abel is a Berkshire executive, vice chairman, and a director who heads the company’s non-insurance operations. He has had that role since 2018.

So long Warren. We’ll always have Omaha.