[NEW YORK] Wall Street stocks tumbled on Wednesday (Apr 16) as the Federal Reserve chief warned of the drag from US President Donald Trump’s tariffs, while Nvidia sank on costs connected to the US-China trade war.
The tech-rich Nasdaq Composite Index finished at 16,307.16, down 3.1 per cent.
The Dow Jones Industrial Average dropped 1.7 per cent to 39,669.39, while the broad-based S&P 500 shed 2.2 per cent to 5,275.70.
US equities opened lower, shrugging off solid retail sales data. But the market dropped much more after Fed chair Jerome Powell warned that Trump’s tariffs could put the Federal Reserve in the unenviable position of having to choose between tackling inflation and unemployment.
Powell said that while the Fed’s employment and inflation goals were largely in balance at this point, policymakers could find themselves in the “challenging scenario” depending on how things evolve.
Powell’s comments “sparked stagflation concerns”, said Jack Ablin of Cresset Capital.
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Powell “took what was a moderately down day into a pretty dramatic slide”, Ablin added.
The remarks come as Trump’s wide-ranging trade agenda continues to dominate discussion in business and financial circles.
Last week, Trump backed off his most onerous “reciprocal” tariffs for every country except China, while maintaining a range of other levies, including on car imports.
There has been little sign of rapprochement between Washington and Beijing, which has responded with increased levies of its own.
Nvidia ended down around seven per cent after earlier slumping more than 10 per cent. The chip company disclosed in a securities filing that it expects a US$5.5 billion hit connected to export licenses for technology that the US government determined could be used for a Chinese supercomputer.
Advanced Micro Devices, which estimated one-time charges of up to US$800 million, fell 7.4 per cent. AFP
