The stock market showed little signs of recovery from the Trump administration’s chaotic tariff rollout after the Federal Reserve issued a bleak outlook on Wednesday.
A CNN expert warned Wednesday night that “bad news is coming” as the markets took another beating. Stocks plummeted after Federal Reserve chairman Jerome Powell said the Fed was keeping its eye on the “highly uncertain” economic effects of Trump’s policies in a speech to the Economic Club of Chicago Wednesday afternoon.
“As we learn more, we will continue to update our assessment. The level of the tariff increases announced so far is significantly larger than anticipated,” he said. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”
Powell’s remarks sent the Dow tumbling 700 points or 1.73 percent, while the S&P 500 slid 2.24 percent and the tech-heavy Nasdaq Composite fell by over 500 points or 3.07 percent. Stock futures did rise after the sell-off—but only slightly. Dow Futures climbed 0.36 percent, S&P 500 Futures grew 0.45 percent, and Nasdaq Futures jumped 0.56 percent.
Wedbush Securities analyst Dan Ives told CNN’s Erin Burnett OutFront on Wednesday that he was particularly concerned about Nvidia stock, which fell 6.87 percent.
“The unfortunate reality: today is a dark day,” he said. “Nvidia, the golden child of the market… got cut at the knees. Because essentially, the government—if you look at it, you could call it ‘restrictions.’ It’s a blockade into China. It’s a ‘Do not enter’ sign into China for U.S. tech.”
In his remarks, Powell referenced the 1986 film Ferris Bueller’s Day Off: “As that great Chicagoan Ferris Bueller once noted, ‘Life moves pretty fast.’ For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance.”
Powell may have been nodding to a scene in the movie where a high school teacher explains why the Smoot-Hawley Tariff Act of 1930 failed. A clip of that scene went viral when President Donald Trump first announced his sweeping “Liberation Day” tariffs.
“The reality is, Powell, he’s seeing the numbers,” Ives said. “And basically, what the market is showing is that bad news is coming.”
Over the weekend, the Trump administration set the stock market up for another whirlwind week with baffling statements on exemptions to the sky-high retaliatory taxes and additional levies on semiconductors.
Trump said in a Truth Social post Sunday that there was “no tariff exception” after U.S. Customs and Border Protection published guidelines quite literally titled “Reciprocal Tariff Exclusion for Specified Products,” which indicated that a wide range of tech devices and parts were exempted from the 125-percent tariff on China.
That same day, Commerce Secretary Howard Lutnick confused market watchers even further by saying any tax exemptions were only temporary, as a separate “semiconductor tariff” was already in the cards.
