Stocks tumble Wednesday as White House curbs chip exports, Powell warns on trade war
Stocks sold off briskly Wednesday as investors grappled with the ongoing U.S. trade war and a key Federal Reserve official called the White House's tariffs uncharted territory.
The Dow 30 Industrials shed 699.57 points, 1.7%, to close at 39,669.39, while the broad S&P 500 was off 2.2%, or 120.89 points, at 5,275.74. The tech-heavy Nasdaq Composite Index slid 3.1% to finish at 16,307.16, a loss of 516.01 points.
The 10-year U.S. Treasury note slipped 4 basis points to close at 4.28%, down more than 20 basis points from its level last week, when a sharp sell-off rattled markets. Bond yields rise as prices fall, and vice versa. Gold tacked on another 3.5% to push above $3,355, a fresh record. The precious metal is now up nearly 29% in the year so far.
Corporate news
Abbott Labs shares gained 2.8% after the healthcare products company reported results before the bell. Earnings slightly topped analyst expectations, but revenue missed.
Shares of behemoth chipmaker Nvidia closed down nearly 7%, after being as much as 10% lower midday. The company on Tuesday night announced that the U.S. government was limiting exports of one of its chips to China. Shares of other semiconductor companies also fell: the iShares Semiconductor ETF, which tracks those stocks, was off nearly 4%.
Hertz shares surged more than 56% after hedge-fund manager Bill Ackman disclosed a stake in the rental car company.
Economic news
In a speech in Chicago in the early afternoon, Federal Reserve Chair Jerome Powell said that the central bank would stay on the sidelines as market upheaval shook out, even as he noted that the trade war complicated matters by potentially raising both unemployment and inflation.
But he also acknowledged that “the level of the tariff increases announced so far is significantly larger than anticipated” and that “there isn’t a modern experience for how to think about this.”
Industrial production, or manufacturing and mining activity, rose by 0.7% in February 2025, the third consecutive month of increases and topping analyst expectations of a 0.2% rise.
Retail sales rose 1.4% in March, the strongest monthly gain since January 2023, the government said, as shoppers hurried to get ahead of fresh tariff announcements.