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U.S. stock markets experienced mixed results on Thursday after President Donald Trump called for the removal of Federal Reserve Chair Jerome Powell, criticizing him for not aggressively lowering interest rates—a sentiment he has expressed repeatedly in an ongoing dispute with the Fed chair.
The Dow dropped by 500 points, equivalent to 1.26%. Meanwhile, the broader S&P 500 increased by 0.3% after briefly going negative earlier in the day. The tech-heavy Nasdaq Composite fell 0.17%, oscillating between gains and losses.
Dow futures plunged sharply on Thursday morning following Trump’s social media post criticizing Powell. The Dow was also pressured by UnitedHealth Group (UNH), which saw its stock fall by 22% after the healthcare giant revised its profit forecast downward for the year.
“Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was yet another, typical, complete ‘mess!’” Trump commented on social media. “Powell’s termination cannot come fast enough!”
Powell remarked at an economic event in Chicago on Wednesday that Trump’s tariffs are unprecedented in recent history, posing a potential risk for inflation and hindering economic growth, which complicates the Fed’s responsibilities and the overall economic outlook. This contributed to a swift market selloff, with the Dow closing down by 700 points, or 1.73%. The S&P 500 declined by 2.24%, while the Nasdaq Composite ended down 3.07%.
“We may find ourselves in a difficult situation where our dual mandate goals conflict,” Powell stated.
Companies during first-quarter earnings calls have highlighted that uncertainty makes forward planning extremely challenging. This week, United Airlines (UAL) provided two forecasts: one assuming a recession and another assuming a stable scenario without recession.
“Recent developments underscore that market fluctuations are likely to continue until there is clearer visibility regarding the future of tariffs,” stated Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, in a note on Thursday.
A forthcoming report from the International Monetary Fund is expected to contain “notable reductions” in economic growth predictions, according to Kristalina Georgieva, managing director of the IMF, who made the announcement in a speech on Thursday.
“Financial market volatility is increasing. Additionally, uncertainty surrounding trade policies is currently at unprecedented levels,” Georgieva noted.
Alphabet (GOOG), the parent company of Google, fell by 1.5% on Thursday after a federal judge concluded that Google has unlawfully developed “monopoly power” within its web advertising sector.
Stocks are reeling from significant losses encountered on Wednesday, triggered by Nvidia (NVDA)’s announcement that it would incur a $5.5 billion loss due to new U.S. government regulations limiting the export of its H20 chips to China. Similarly, Advanced Micro Devices (AMD) indicated in a regulatory filing this week that it could face an $800 million loss from comparable export restrictions.
Dan Ives, an analyst at Wedbush Securities, remarked in a note on Thursday that the market has been fraught with “much angst” since Trump revealed his strategy for “reciprocal” tariffs on April 2.
“This week marked the initial confrontations in the trade war pertaining to the tech industry, as the White House effectively obstructed Nvidia from selling its essential H20 chips to China,” Ives stated.
Stock futures had risen overnight as investors enjoyed a brief period of calm. Trump took to social media on Wednesday afternoon to announce that he had met with a delegation from Japan regarding trade. “Big Progress!” Trump tweeted.
On Thursday morning, Trump indicated that he had a “very productive call” with Mexico’s President Claudia Sheinbaum the previous day.
Trump also mentioned, “I met with top-level Japanese Trade Representatives. It was a very productive meeting. Every nation, including China, wants to engage! Today, it’s Italy!”
The yield on the 10-year Treasury hovered around 4.29%, a slight increase from Wednesday’s figures. The U.S. dollar index edged slightly higher after hitting a three-year low on Wednesday.
The European Central Bank lowered its primary interest rate on Thursday as Trump’s tariffs are anticipated to impact the region’s economic landscape. Europe’s benchmark STOXX 600 index showed a decline of 0.1% during afternoon trading.
Trading in the U.S. will be inactive tomorrow in observance of Good Friday.
This is a developing story and will be updated.
