The Day at a Glance | May 5 2025

• The Federal Reserve will leave its benchmark interest rate unchanged this Wednesday.

• U.S. President Donald Trump stated that his administration is in talks with several countries and that trade agreements could be reached in the coming days, aiming to ease tariff tensions.

• The U.S. ISM Services Index for April 2025 will be released later today, and it’s expected to come in at 50.2 points, down from 50.8 in March.

• Investor sentiment in the Eurozone rebounded more strongly than expected in May, following a sharp drop the previous month caused by tariffs imposed by President Donald Trump.

• The Bank of Japan believes the window for additional rate hikes hasn’t fully closed yet, though it acknowledges it’s narrowing quickly due to Trump’s tariffs, which pose the biggest challenge since Kazuo Ueda took office as governor.

• Oil prices dropped over 1% on Monday after OPEC+ decided over the weekend to further accelerate its production increases, raising concerns about higher supply in a market already strained by demand uncertainty.

Economic Environment

The Federal Reserve will leave its benchmark interest rate unchanged this Wednesday. This week’s most significant event will likely be the Federal Open Market Committee´s (FOMC) policy announcement, scheduled for Wednesday, May 7^th. We expect the following: 1) the federal funds rate will remain in the 4.25%-4.50% range, and 2) there may be changes to the wording of the statement, in which the Committee will likely highlight the uncertainty surrounding the future path of the economy, driven by shifts in the current administration’s economic policy. Overall, this may set the stage for the FOMC to extend the pause in its monetary easing cycle not just at this meeting, but over several upcoming ones. In this context, Fed Chair Jerome Powell’s press conference will be especially important, as it could provide clearer guidance on the Committee’s internal expectations.

Markets and Companies

U.S. stock markets are starting the week with losses after President Donald Trump unexpectedly announced 100% tariffs on films produced outside the U.S. Shares of Walt Disney and Netflix—both with overseas productions—fell 2.5% and 5%, respectively. Warner Bros also dropped nearly 4%.

In Europe, markets are logging mixed movements. U.K. markets are closed for a public holiday, while investors await new economic data and corporate earnings reports set to be released later this week.

In Asia, regional currencies strengthened against the dollar on Monday, led by the Taiwanese dollar, which gained 5.77%.

In commodities, oil prices are falling after OPEC+ decided to increase production for a second consecutive month.

In contrast, gold prices are rising, driven by dollar weakness, as investors await further details on U.S.-China trade negotiations and the upcoming Federal Reserve policy decision.

In Mexico, the IPC index is trending lower (-0.20%). Over the weekend, the exchange rate fluctuated between a low of 19.55 and a high of 19.67. It currently stands at 19.61.

Corporate News

• Shares of Howard Hughes Holding jumped 8% after activist investor Bill Ackman’s fund, Pershing Square, announced it will purchase 9 million newly issued shares at $100 each. The price represents a 48% premium over Friday’s close.

• Shares of Wolfspeed rose 7%, adding to Friday’s 24% rally. The surge came after the company reaffirmed its third-quarter guidance and announced the departure of CFO Neill Reynolds.