MARKET SNAPSHOT

U.S. stocks fell ahead of Wednesday's Federal Reserve meeting. Treasury yields fell as investors sought the safety of U.S. government debt and as odds of another Fed hold in June rose to 68%, from 35% a week ago. Oil rose sharply as the EIA cut its 2025 average U.S. oil production forecast to 13.4 million barrels a day from 13.5 million. Gold set yet another record high, closing up 3%, while the dollar fell.

MARKET WRAPS

EQUITIES

Stocks fell for the second-straight session as investors await the Federal Reserve's next move.

The S&P 500 ceded 0.8%, the Dow Jones Industrial Average came off the day's lows, but finished nearly 1% lower, and the Nasdaq Composite surrendered 0.9%.

The Federal Open Market Committee began a two-day meeting, with a policy update due Wednesday afternoon. Traders expect the central bank to leave its key rate unchanged. The U.S. trade deficit ballooned 14% to a record $140.5 billion in March, as businesses stockpiled goods to get ahead of sweeping tariffs that President Trump imposed the following month.

Earlier Tuesday, mainland China markets were higher. The Shanghai Composite Index was up 1.1%, the Shenzhen Composite Index 2.3% higher, and ChiNext Price Index up 2%. Hong Kong's Hang Seng Index added 0.7%, the fourth consecutive session of increases.

Markets in Japan were closed for the Greenery Day holiday.

Australian stocks fell slightly, with the S&P/ASX 200 down 0.1% -- the second consecutive session of decreases. Meanwhile, stocks in New Zealand were flat, as the S&P/NZX 50 held steady.

COMMODITIES

Crude futures picked up from the previous day's losses. The EIA, in its monthly outlook, cut its 2025 average U.S. oil production forecast to 13.4 million barrels a day from 13.5 million b/d, but still up from 13.2 million b/d in 2024.

West Texas Intermediate rose 3.4% to $59.09 while Brent crude settled up 3.2% at $62.15.

Permian producer Diamondback Energy's CEO warned shareholders that the company expects activity to slow and production to decline with current low prices.

After trading weaker in recent sessions in a resurgent risk-on climate, gold pushed higher -- with the front-month contract closing up 3% to $3,411.40 a troy ounce -- a fresh record high.

Helping lift gold was pent up demand out of China after an extended holiday there, said Ole Hansen of Saxo Bank.

TODAY'S TOP HEADLINES

Carney, Meeting Trump, Says Canada Isn't for Sale

Canadian Prime Minister Mark Carney told President Trump his country was "not for sale" after Trump reiterated his call for Canada to become the 51st state.

After signaling he would drive a hard bargain to resolve the trade war that has severely strained relations between the two countries, Trump on Tuesday opened the White House meeting by suggesting Canada become part of the U.S.

Trump offered a softer than usual pitch for annexation. He said it would lead to a massive tax cut for Canadian citizens, with "free military" support, and added that getting rid of the "artificially drawn" line between the countries would make for a "beautiful formation."

U.S. Trade Deficit Hits Record as Companies Front-Load Pharmaceuticals

The U.S. trade deficit ballooned 14% to a record $140.5 billion in March, as businesses stockpiled goods to get ahead of sweeping tariffs that President Trump imposed the following month.

The value of imported goods totaled $346.8 billion, according to Census Bureau data, continuing a sharp increase that began in January. Nearly all of the $22.5 billion surge in imported consumer goods for March were pharmaceutical products, which the Trump administration is currently considering to hit with tariffs. Imports of computer accessories, automobiles, and car parts and engines also increased.

The rush may be short-lived. Trump announced tariffs on all imported goods on April 2, and ratcheted up his trade war with China. Cargo shipments from China have slowed considerably, with additional tariffs on Chinese goods now pegged at 145%.

Fed Confronts Lose-Lose Scenario Amid Haphazard Tariff Rollout

The haphazard rollout of President Trump's tariff policy threatens to put the Federal Reserve in a lose-lose scenario: Navigate a recession or manage a period of stagflation.

How the Fed negotiates tricky communications around these trade-offs will be front and center at officials' two-day policy meeting this week.

Fed Chair Jerome Powell and his colleagues are on track to extend their wait-and-see stance on cutting interest rates and strategize how to refine it. This calculated patience reflects officials' determination to avoid prematurely abandoning their inflation fight.

AMD Beats Earnings. The Stock Is Jumping.

Advanced Micro Devices reported better-than-expected earnings results Tuesday afternoon on strong data-center chip sales. It shares rose in after-hours trading.

The semiconductor company reported first-quarter adjusted earnings per share of 96 cents, compared to Wall Street's consensus estimate of 94 cents, according to FactSet. Revenue came in at $7.4 billion, above analysts' expectations for $7.1 billion.

AMD also offered a robust outlook. The company offered a sales range for the current quarter with $7.4 billion at the midpoint versus the $7.2 billion analysts' estimate.

Super Micro Cuts Full-Year Outlook After Results Disappoint

Super Micro Computer cut its sales outlook for fiscal 2025, citing short-term impacts of heightened economic uncertainty and tariffs that prompted some customers to delay orders of new servers and computer products.

Despite missing out on these orders in the recent quarter, Chief Executive Charles Liang said Tuesday that many of those commitments will now land in future quarters instead. He noted the likelihood of future orders reinforces his confidence in the company's ability to meet long-term targets.

The server maker now expects sales of $21.8 billion to $22.6 billion for its fiscal year ending June 30, down from a prior outlook of $23.5 million to $25 billion. Analysts polled by FactSet modeled revenue of $23.55 billion.

Rivian Expects Tariffs to Dent Demand for Its EVs

Rivian Automotive cut its outlook for vehicle deliveries and upped expectations for capital expenditures for the full year, as evolving tariff policies rattle guidance for the electric-vehicle maker.

Rivian on Tuesday said that the changing landscape of trade policies will impact both consumer sentiment and demand. It now expects vehicle deliveries between 40,000 and 46,000 this year, down from a prior range between 46,000 and 51,000.

The expected impact from tariffs, meanwhile, will cause its capital expenditures to come in between $1.8 billion and $1.9 billion for the year, up $200 million on either end of its prior range.