Weaker growth, more job losses, Fed Chlef slams Trump’s tariffs

US stocks fell Wednesday as Federal Reserve Chair Jerome Powell warned that President Donald Trump’s tariffs are unprecedented in modern history, with effects that “remain highly uncertain.”  “The level of the tariff increases announced so far is significantly larger than anticipated,” Powell said at the Economic Club of Chicago. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.” 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.
The Dow tumbled 700 points, or 1.73%. The broader S&P 500 fell 2.24%. The tech-heavy Nasdaq Composite tumbled 3.07%. Nvidia (NVDA) slumped 6.87% on Wednesday after the chipmaker said it would take a $5.5 billion hit because the US government placed new restrictions on the export of its artificial intelligence chips to China.
Powell's comments "sparked stagflation concerns," said Jack Ablin of Cresset Capital. Powell "took what was a moderately down day into a pretty dramatic slide," Ablin added. The dollar also weakened further after Powell's remarks, retreating about one percent against the euro."Markets are increasingly convinced that the US economy is losing steam," said a comment from Forexlive published ahead of Powell's remarks that pointed to market speculation about Fed interest rate cuts.  Wall Street has been mired in uncertainty as investors wrestle with the Trump administration’s back-and-forth on trade policy.