Shares in US film studios slid on Monday, May 5, following a threat by US President Donald Trump to impose 100% tariffs on foreign-made productions. Meanwhile, oil prices slumped after OPEC+ countries announced an output hike despite oversupply concerns and growing fears that Trump's trade war could weaken demand.
Globally, stock markets were mixed in holiday-thinned trading ahead of central bank decisions on interest rates later in the week. On Wall Street, the Dow edged higher in midday trading, but the S&P 500 was down, putting a nine-day winning streak in peril.
US stocks are coming off two strong weeks, with gains last Friday driven by strong jobs data and improving sentiment about US-China trade talks. Shares in Berkshire Hathaway fell around 5% after influential billionaire investor Warren Buffett said Saturday that he would retire from leading the firm he built into a conglomerate worth more than $1 trillion.
Shares in entertainment firms slid after Trump said Sunday he was ordering new tariffs on all films made outside the United States, claiming Hollywood was being "devastated" by a trend of US filmmakers and studios working abroad. Shares in Lionsgate studios dropped more than 5%, while Netflix, whose foreign productions for its subsidiaries have often become popular globally, saw its shares fall around 2%. Shares in Disney, Paramount and Warner Bros. Discovery were also lower in midday trading.
In Europe, Paris ended lower while Frankfurt climbed as Germany's conservatives and centre-left Social Democrats reached a coalition deal for governing. London was closed for a public holiday, as were Tokyo and Hong Kong in Asia.
Investors are waiting for interest rate decisions this week, with the US Federal Reserve and the Bank of England holding policy meetings on Wednesday and Thursday, respectively. "Our US economists expect the Fed to keep rates steady and avoid explicit forward guidance about the policy path ahead," Deutsche Bank analysts said. The dollar fell against other major currencies.