Wednesday's session at Wall Street ended with strong drops in the main indexes. Dow lost almost 700 points, and technology companies led in declines. Investors also analyzed the statement of the head of the Federal Reserve Jerome Powell, who assessed that customs could be a challenge for the Fed.
Dow Jones Industrial at the closure fell by 1.73 percent, i.e. by 699.57 points, to 39,669.39 points S&P 500 at the end of the day fell by 2.24 percent and amounted to 5,275.70 points Nasdaq Composite lowered by 3.07 percent Until 16.307.16 points The index of companies with the average capitalization of Russell 2000 loses 1.03 percent. and is 1,863.67 points The VIX index grows by 8.37 percent, to 32.64 points This is a change after three in a row inheritance sessions. Last week, VIX, known as a “fear meter” on Wall Street, reached about 60 points.
The moods on the stock exchanges have deteriorated after new US restrictions on the export of chips to China and the statements of the head of the Federal Reserve Jerome Powell. The head of the Fed during a conference in Chicago assessed that duties could be a challenge for the FED between inflation control and stimulating economic growth. The Fed may wait with considering the adaptation of monetary policy to greater clarity in the markets.
– It is our duty to maintain long -term inflation expectations at the appropriate level And so that a one -time increase in price level does not become a lasting problem. To achieve these goals, we must balance our obligation to ensure maximum employment and stable prices, remembering that without stable prices we will not achieve good conditions on the labor market in the long run. We can find ourselves in a difficult position in which our goals will be contradictory. If that happened, we will have to consider how far our economy is from and what period you can expect to close these gaps – said Powell.
During the Question and Answers session, he assessed that customs can increase inflation in the near future and probably would dismiss the Fed from the assumed goals. The head of the Fed from Cleveland, Beth Hammack, estimated that the central bank may be forced to aggressive interest rates in the event of a rapid slowdown in economic growth.
– Considering the current conditions, including a high level of uncertainty as to commercial policy, there are strong arguments for maintaining stable monetary policy in order to balance the risk associated with the further increase in inflation and slowing down on the labor market – she said.
Investors evaluated the last news about the US trade policy. The sector of technology companies after the US restriction against Nvidia – on limiting exports of H20 and Mi308 AMD to China was the most lost. The Bloomberg agency reported on Wednesday, citing sources that China wants to see a number of steps from the administration of President Donald Trump, before they agree to trade, including showing greater respect by stopping the contemptuous comments of his office members.
Nvidia shares fell by nearly 7 percent, AMD by over 7 percent, while Micron Technology, Broadcom, reduced over 2 percent.
The ASML chip manufacturer warned that the US duties on imports increase uncertainty as to the company's financial prospects for 2025 and 2026. Orders of the company in the first quart have not met market expectations. The course went down by about 7 percent Microsoft's quotations fell by more than 3 percent. Morgan Stanley reduced the target price for the company's shares to USD 472 from USD 530.
– In our opinion, Trump cannot win a trading battle with China. Beijing can withstand longer than the USA, and Trump will eventually have to withdraw. However, the initial US administration policy will probably consist in isolating China to obtain better conditions. So the road to the final contract will probably go through greater variability of the market – said Mohit Kumar, the main financial economist at Jefferies.
Stacy Rasgon, Bernstein analyst, said that the ban on using the H20 chip does not make sense because it would give the Chinese market to rivals like Huawei. President Donald Trump also ordered an investigation into potential new duties for all key minerals imported by the US, as well as an analysis of imports of pharmaceutical products and chips.
– The fact that the customs war between the US and China goes beyond the duties is bad news, because it means that China themselves can decide to introduce export control, which could cover the metals of rare lands and goods necessary for manufacturers of integrated circuits and machines – said IPEK Oskardeskaya, senior market analyst at Swissquote Bank.
Citi analysts reduced the growth forecasts of the global economy in 2025 after the tariff plans of President Donald Trump. Analyst Nathan Sheets forecasts a backlight at 2.1 percent. – This is a decrease from 3 percent. In 2024, IO 0.5 pp. lower than forecasts in March. In 2026, growth is to slightly reflect – up to 2.3 percent. – Clinics increased to historically high levels, which is a challenge for the global economy. (…) Given the trajectory of recent events, the risk for our forecast is strongly tilted down ” – wrote the analyst.
Travelers Companies shares increased by 1 percent after the insurer recorded better profits for and KW.
The Mortgage Banks Association (MBA) announced that in the USA a decrease in the index of applications for MBA mortgage applications was recorded – the seasonal index fell by 8.5 percent. In the week ended on April 11.
In turn, the statistics of the Trade Department said that retail sales in the USA in March increased by 1.4 percent. month to month. Analysts expected sales to increase by 1.4 percent. Retail sales, excluding sales of cars, increased by 0.5 percent, an increase of 0.7 percent was expected.
The US Federal Reserve said that industrial production in the US in March fell by 0.3 percent. MDM. It was expected that production would fall by 0.2 percent. MDM against +0.8 percent A month earlier, after a revision with +0.2 percent Industrial processing increased 0.3 percent MDM. It was forecasted that the processing would increase by 0.2 percent. MDM, compared to +1 percent a month earlier, after correction with +0.9 percent
On the oil market, contracts for WTI on May increase by 2.30 percent. up to USD 62.74 per barrel, and June Futures on Brentures grow by 2.15 percent. up to 66.06 USD/B. (PAP Biznes)
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