New York
CNN
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US stocks were lower Thursday morning after President Donald Trump called for the termination of Federal Reserve Chair Jerome Powell for not cutting interest rates fast enough — a criticism he has levied multiple times in a long-standing feud between the president and the Fed chair.
The Dow tumbled 700 points, or 1.8%. The broader S&P 500 slid 0.3% and the tech-heavy Nasdaq Composite fell 0.65%, erasing their gains after opening higher.
Dow futures had dropped steeply Thursday morning as Trump posted on social media lambasting Powell. The Dow was also dragged lower by UnitedHealth Group (UNH), which sank 18% after the health care giant cut its profit forecast for this year.
“Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’ Trump posted on social media. “Powell’s termination cannot come fast enough!”
Powell said Wednesday at an economic event in Chicago that Trump’s tariffs are unlike anything in modern history, with the potential to stoke inflation and drag on economic growth, complicating the Fed’s job and the outlook for the economy. That led to a rapid selloff, with the Dow closing 700 points lower, or 1.73%. The S&P 500 fell 2.24% and the Nasdaq Composite closed 3.07% lower.
“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said.
Companies on first-quarter earnings calls have said that uncertainty makes it extraordinarily difficult to plan ahead. United Airlines (UAL) this week offered two versions of guidance: one for a recession scenario, and one for a non-recession, “stable” scenario.
“Recent developments are a reminder that market swings are likely until there is greater certainty over the outlook for tariffs,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, in a Thursday note.
Stocks are coming off sharp losses on Wednesday that began after Nvidia (NVDA) said it would take a $5.5 billion hit because the US government imposed fresh export restrictions on the the sale of its H20 chips to China. Advanced Micro Devices (AMD), another chipmaker, said in a regulatory filing this week it could take an $800 million hit because of similar export restrictions.
Dan Ives, analyst at Wedbush Securities, said in a Thursday note that there has been “much angst in the market” since Trump unveiled his plan for “reciprocal” tariffs on April 2.
“This week were the first shots fired in the trade war in the tech world as the White House has essentially blocked Nvidia from selling its key H20 chips to China,” Ives said.
Stock futures had gained overnight as investors enjoyed a moment of relative calm. Trump posted on social media Wednesday afternoon that he had met with the Japanese delegation on trade. “Big Progress!” Trump wrote.
Trump on Thursday morning said he had a “very productive call” with Mexico President Claudia Sheinbaum on Wednesday.
“Likewise, I met with the highest level Japanese Trade Representatives,” Trump wrote. “It was a very productive meeting. Every Nation, including China, wants to meet! Today, Italy!”
The yield on the 10-year Treasury traded around 4.29%, up slightly from Wednesday. The US dollar index gained slightly after sliding to a three-year low on Wednesday.
The European Central Bank on Thursday cut its main interest rate as Trump’s tariffs portend to impact the region’s economy. Europe’s benchmark STOXX 600 index was down 0.37% in afternoon trading.
Trading in the US will be closed tomorrow for Good Friday.
This is a developing story and will be updated.
