Morning Report 07 May 25: US shares drop as investors await trade deals and a Fed decision

CommSec Market Update

US stocks fell as investors awaited key trade developments and an upcoming Federal Reserve decision. Palantir shares slumped by the most in a year following a weak sales forecast, while pharmaceutical stocks dipped after President Trump announced new tariffs. Tesla also reported a sharp decline in sales across major European markets. Still in Europe, German stocks pared losses after Frederick Merz was elected Chancellor, offering some political stability. Meanwhile, China’s services sector growth slowed to a seven-month low, raising fresh concerns about the global recovery. In commodities, oil rebounded on signs of stronger demand from Europe and China, while gold rose more than 3% as attention turned to the Fed’s next move. Closer to home, Aussie shares are expected to open lower on Wednesday, with investors eyeing NAB’s earnings results.

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