On Wednesday, Wall Street experienced historic whiplash. The Dow Jones Industrial Average tumbled nearly 500 points, its third consecutive down day. The indices are all under intense pressure. The S&P 500 has given up roughly 2.2%, and the tech-heavy Nasdaq Composite has lost close to 3.1%. Investors have become concerned about this counterproductive trend. Their fears were exacerbated by testimony from Federal Reserve Chair Jerome Powell on the way that tariffs could affect inflation.
Yet the Dow just caved in by nearly 5.6% during the last few trading days — it’s a measure of our increasing panic about what’s happening economically. Dow futures lost their initial gains as they tried to stage a comeback, gaining 23 points, or 0.06%. This very small improvement was not enough to counter the overall increase each year. Stocks fell to session lows on Wednesday in the afternoon. This decline underscores volatility in trading activity that’s been sparked by former President Trump’s recent proclamations regarding tariffs.
While economists differ on the long-term impacts of tariffs, in a recent statement Jerome Powell said they are likely to increase inflation in the short run. He emphasized that these tariffs are “likely to move us further away from our goals,” suggesting that they could hinder economic stability. Peter Boockvar, one of Wall Street’s leading market analysts, pointed out that the economy is standing on “very weak knees.” This concern is symptomatic of much larger issues that are deeply felt by all.
Nvidia, the biggest beneficiary of the chip industry’s close ties to the Defender-led technology sector, deepened its losses further in extended trading, declining by about 1.3%. This was an even steeper decrease coming on the heels of a huge 6.9% session drop. The firm only recently disclosed a quarterly charge of about $5.5 billion. This fee results from having to halt its H20 graphics processing units (GPUs) exports to China and other mainstays, attributable to U.S. export controls. The ongoing trade tensions have been extremely disruptive to Nvidia’s business and stock price.
Trading activity has been especially volatile since Trump announced his intention to impose sweeping, new “reciprocal” tariffs on April 2. Most of these tariffs were just temporarily suspended for 90 days last week, offering a short-term reprieve for jittery markets. Trump’s shock exemption in favor of smartphone and PC imports hasn’t entirely removed the sting among investors. The Nasdaq composite closed the session nearly 19% from its closing peak. This drop leaves the index only a few percentage points from bear market territory.
The combined impact of all of these changes has made for a jumpy environment across Wall Street. Investors are still trying to understand the impact of the current state of trade, continuing inflation worries, and the possibility of more extended economic turmoil. As trading continues, market participants will closely monitor how these factors evolve and influence stock performance in the coming days.
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