Sell-Off Grips Wall Street as Economic Risks Rise
The stock market experienced a significant downturn during afternoon trading, following a warning from Federal Reserve Chair Jerome Powell about the potentially severe economic consequences of escalating trade tensions. The S&P 500 dropped by 5.4%, the Dow Jones Industrial Average plummeted by 1,900 points, and the Nasdaq Composite Index decreased by 5.5%. These indices hit their lowest points since last May, extending losses from the previous session. Powell highlighted the growing risks of inflation and reduced economic growth, maintaining a prudent approach regarding potential interest rate cuts. Investor concerns heightened after China's finance minister announced a 34% tariff on all U.S. imports, in retaliation to President Trump's recent tariff escalation. Economists caution about the possibility of increased prices, slowed economic expansion, and a potential recession, notwithstanding stronger-than-forecasted payroll figures. The sell-off was widespread, with the energy sector suffering the most, followed by financials, technology, and industrial stocks. 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%) faced notable declines.
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