U.S. stocks tumbled on Wednesday as tariff fears returned to Wall Street.
Dow Jones Stock Markets: Dow, Nasdaq, S&P 500 fall sharply; Nvidia worst-hit; Top 3 reasonshttps://t.co/ZEb4ZN4Pgf
— ET NOW (@ETNOWlive) April 17, 2025
The S&P 500 dropped more than 2.2%, while the Dow Jones Industrial Average shed roughly 700 points, or around 1.7%. The tech-heavy Nasdaq Composite fell over 3%, as new chip provisions weighed heavily on the tech sector.
Federal Reserve Chair Jerome Powell delivered a stark warning about the potential stagflationary effects of recent tariff policies. He highlighted that the central bank would “wait for greater clarity” before considering any interest rate adjustments. Powell warned that the tariffs could lead to “higher inflation and slower growth” in the U.S. economy.
Stocks To Watch | 📊Ready, set, trade! Keep an eye on these stocks as they set the market abuzz #StockMarket #TrumpTarrifs pic.twitter.com/AdfXcJ3cLB
— ET NOW (@ETNOWlive) April 17, 2025
Meanwhile, AI chip giant Nvidia found itself caught in the crossfire of the U.S.-China trade war.
The US stock market does not like what it is hearing so far from Chair Powell's Q&A.#economy #markets #stocks #investing #investors #FederalReserve pic.twitter.com/dKpQApbDzI
— Mohamed A. El-Erian (@elerianm) April 16, 2025
Shares fell about 7% after the company revealed that the U.S. government had imposed new restrictions on its chip exports to China. The company noted that the move would result in $5.5 billion in charges.
Treasury Secretary Scott Bessett stated on Tuesday that he expects “substantial clarity” on tariffs with major U.S. trading partners, excluding China, over the next 90 days. China responded by suggesting it is open to talks but only under certain conditions. In commodities, gold reached a new record as the escalating trade war pushed investors toward safe havens.
Powell used the example of the auto industry to illustrate how supply chain disruptions caused by tariffs could lead to prolonged inflation.
U.s. stocks face new tariff worries
He noted that foreign autos and certain auto parts face a 25% tariff when entering the U.S.
AI chip leader AMD also made a similar announcement to Nvidia, saying new provisions could cost up to $800 million.
Due to these announcements, Nvidia and AMD both dropped about 7%. Netflix is set to report its first-quarter earnings after the bell on Thursday. Despite the market volatility, Netflix’s strong subscription model, which has historically performed well in recessions, has made its stock a defensive choice for investors.
Netflix stock is up 9% this year, outperforming competitors like Amazon and Alphabet. Tech stocks led the downturn as new restrictions on semiconductor exports to China were disclosed. Nvidia’s shares were down more than 9%, with Meta, Microsoft, Amazon, and Apple all experiencing declines exceeding 3%.
Tesla shares were lower by more than 5%. Federal Reserve Chair Jerome Powell also addressed recent volatility in the bond market, noting it is “premature to say exactly what’s going on.” Long-term Treasury yields skyrocketed last week, driven by President Trump’s policies, with the 10-year yield reaching its highest level since February. During a Q&A session at the Economic Club of Chicago, Powell was asked whether the Federal Reserve would intervene if the stock market continued to plummet.
He denied the existence of a so-called “Fed put,” emphasizing that markets are currently attempting to assess a highly uncertain environment, which inherently leads to volatility. “Markets are doing what they’re supposed to do,” Powell said. “They’re orderly and functioning as you would expect them to in this time of high uncertainty.”
Overall, U.S. stocks faced a challenging day as tariff concerns and regulatory uncertainties weighed heavily on market sentiment.