U.S. markets plunged Wednesday as renewed tariff concerns rattled Wall Street. The concerns were fueled by Federal Reserve Chair Jerome Powell’s caution over potential inflation and slowing growth. Powell’s remarks came amid growing unease surrounding President Trump’s evolving trade policies.
The S&P 500 dropped 2.2%, while the Dow Jones Industrial Average shed roughly 700 points, or 1.7%. The Nasdaq Composite suffered the steepest loss, falling more than 3%, weighed down by heavy losses in the tech sector.
Nvidia shares tumbled nearly 7% after the company disclosed that new U.S. government restrictions on chip exports to China would cost it $5.5 billion. The announcement marked a significant escalation in the ongoing trade tensions between the two countries and sent shockwaves through tech stocks.
During a speech in Chicago, Powell signaled that the Federal Reserve is holding off on any interest rate changes until there is more clarity on the trade landscape. He warned that the tariffs will likely lead to higher inflation and slower economic growth, raising the possibility of conflicting pressures on monetary policy.
Consumer behavior is already shifting in response to the uncertainty. Retail sales surged 1.4% in March, the strongest pace in over two years, as shoppers rushed to make purchases ahead of expected price increases from the tariffs.
Meanwhile, gold prices surged to a new record, as investors flocked to safe-haven assets amid the mounting trade tensions and market volatility.
While Treasury officials suggested a breakthrough on tariffs may come within 90 days, excluding China, uncertainty remains high. China, in turn, signaled a willingness to resume trade talks, but only under specific conditions.
Source: Yahoo Finance