NEW YORK, May 6 (Xinhua) -- U.S. stocks closed lower on Tuesday as investors sifted through a wave of corporate earnings while looking ahead to developments on trade talks and the outcome of the Federal Reserve's two-day policy meeting, which began earlier in the day.

The Dow Jones Industrial Average fell 389.83 points, or 0.95 percent, to 40,829.00. The S&P 500 dropped 43.47 points, or 0.77 percent, to 5,606.91, while the Nasdaq Composite Index slid 154.58 points, or 0.87 percent, to finish at 17,689.66.

Nine of the eleven S&P 500 sectors ended in negative territory, led by healthcare and consumer discretionary, which declined 2.76 percent and 0.85 percent, respectively. Utilities and energy were the only sectors to post gains, up 1.23 percent and 0.10 percent.

Stocks seesawed on Tuesday following a meeting between U.S. President Donald Trump and Canadian Prime Minister Mark Carney, their first formal negotiation session since Carney recently took office. During the meeting, Trump dialed back earlier optimism about impending trade agreements, stating bluntly, "We don't have to sign deals." The remark marked a sharp reversal from his Sunday comments, when he suggested multiple deals could be finalized as soon as this week.

Investors are now turning their attention to the Federal Reserve, which is not expected to change its benchmark interest rate this week. However, markets are eagerly awaiting Fed Chair Jerome Powell's remarks on Wednesday, particularly his views on how the Trump administration's tariff policies may be influencing the broader economic outlook.

"Despite external pressure to lower rates, the Fed will likely hold strong on the current pause until we see greater clarity on the major economic factors impacting the economy," said Steve Rick, chief economist at TruStage. "As the impacts of tariffs settle in, we still broadly expect the economy to continue to shift towards a slower pace of growth than in recent months."

Earnings reports drove notable stock movements on Tuesday. Palantir plunged 12.05 percent, making it the biggest decliner in the S&P 500, despite meeting first-quarter earnings expectations and providing a positive forecast. In contrast, Constellation Energy surged 10.29 percent after beating revenue estimates, fueled by rising electricity demand linked to AI infrastructure growth.

Ford Motor gained 2.65 percent after surpassing quarterly profit estimates, though it withdrew its full-year guidance due to tariff-related uncertainty. Mattel also climbed 2.78 percent as it suspended its outlook and announced price hikes in response to tariffs.

Large-cap tech stocks, which had recently driven much of the market's rally, faced selling pressure. Tesla and Meta Platforms both declined by about 2 percent, while Microsoft, Amazon, Alphabet, Broadcom, Apple and Nvidia also lost ground. ■