FX.co ★ Wall Street Takes a Hit on Trade War Fears, Fed Remarks

The stock market experienced a significant downturn during late trading on Friday as Federal Reserve Chair Jerome Powell cautioned about the potentially more severe than anticipated economic impacts from the ongoing trade tensions. The S&P 500 decreased by 5.7%, the Dow dropped 2,000 points, and the Nasdaq fell by 5.6%, marking their lowest points since last May and continuing the losses from the previous session. Powell highlighted escalating risks of inflation and slower economic growth, while maintaining a prudent, observational approach regarding interest rate adjustments. Market fears were further fueled following an announcement from China's finance minister about imposing a 34% tariff on all U.S. imports, echoing President Trump's actions the day before. Economists raised concerns about the likelihood of increased prices, reduced growth, and a potential recession, even in light of better-than-expected payroll figures. The downturn was widespread, with the energy sector leading the decline, followed by financials, technology, and industrial sectors. Major technology companies such as Apple (-5.9%), Microsoft (-2.5%), Nvidia (-8.1%), Amazon (-2.4%), Meta (-4.8%), Alphabet (-2.5%), and Tesla (-9.8%) suffered significant losses.