Wall Street sinks after US Federal Reserve warning, as Nvidia leads decline in tech stocks
Chairman Jerome Powell says the US central bank will not intervene to calm markets roiled by Trump’s tariff war
Warnings from Jerome Powell that trade tensions risk undermining the US Federal Reserve’s employment and inflation goals whipped up fresh volatility on Wall Street Thursday, with stocks resuming sharp declines while haven assets like Treasuries and gold surged.
Two days of relative calm were broken as the Fed chief signalled a wait-and-see approach to US President Donald Trump’s tariff offensive, pushing back on hopes he would act quickly to soothe investors.
Stocks extended losses that began earlier when two big semiconductor companies reported earnings disappointments linked to the global trade war.
Asked at the Economic Club of Chicago if he envisioned a “Fed put” in which the central bank intervened to calm markets, Powell said “no”, adding that too many questions exist about the impact of Trump’s policies. “We don’t know that yet, and until we know that we can’t make informed decisions.”
The S&P 500 sank 2.4 per cent. Technology stocks took the brunt of the beating with the Nasdaq 100 tumbling 3.1 per cent after the White House imposed new restrictions on Nvidia Corp.’s chip exports to China. The yield on 10-year Treasuries fell around six basis points to 4.28 per cent.
For now, the Fed chief stressed, the labour market is “in a really good place”, with supply and demand falling in tandem. Powell said he expected those conditions to continue.