Stock market bears growled louder Wednesday after Federal Reserve Chairman Jerome Powell warned of growth concerns stemming from President Donald Trump's tariffs. Losses mounted for all three stock indexes on the stock market today, though they came off lows just before the close.
The selling got kick-started as news of an additional China trade barrier for Nvidia put a chill on tech firms specializing in artificial intelligence. Then the freeze cascaded throughout the markets and gained momentum with Powell's comments.
By closing time, the Dow Jones Industrial Average tumbled by 1.7%, or 700 points. Blue chips were down nearly 1,000 points about a half hour before the trading day concluded.
The S&P 500 dropped 2.2%. It too hit a low point in the final hour of trading, falling 3.3% at one juncture. The Nasdaq took the hardest shot as it ended the day down 3.1% but had dipped as low as 4.5% near the close.
Small-cap stocks on the Russell 2000 dropped 1%, while the Innovator IBD 50 exchange traded fund also gave back 1%. The yield on the benchmark 10-year Treasury note fell four basis points to 4.29%.
Volume was higher on the New York Stock Exchange and the Nasdaq compared with the same time on Tuesday. Decliners outnumbered advancers by 5-to-3 on the NYSE and 2-1 on the Nasdaq.
3:22 p.m. ET
Hertz Soars On Ackman Stake
Meanwhile, Hertz Global Holdings soared on news Bill Ackman's Pershing Square took a stake of 12.7 million shares in the rental car icon. Hertz stock was trading close to its all-time low of 2.47. Shares had plunged from their all-time high of 46.
Earnings initially moved United Airlines higher Wednesday but shares reversed for a loss in afternoon action. Sales grew 5% to $13.2 billion but earnings of 91 cents per share surged after a loss of 15 cents per share in the prior year.
Shares briefly cleared their 21-day moving average after a three-day winning streak but pulled back in recent action. The stock remains below its 50-day and 200-day moving averages.
Stocks Plunge On Nvidia, Powell; Two Dow Giants Loom
2:08 p.m. ET
Powell: 'Temporary Rise In Inflation' Coming From Tariffs
Speaking at the Economic Club of Chicago, Fed Chair Powell warned of slowing growth and higher inflation from President Trump's tariffs.
"Tariffs are highly likely to generate at least a temporary rise in inflation," Powell said. But their "effects could also be more persistent," he added.
However, the economy remains stable and long-term inflation rates appeared to be well anchored, Powell noted.
"For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance," the Fed chair said.
The odds of a 25-basis-point rate cut in June stand at 60.2%, according to the CME FedWatch Tool.
Stock Market Today: No Help From China's Olive Branch
The fact that China was opening the door to trade negotiations with the U.S. didn't seem to keep major indexes from plunging, however. Reports said China was willing to negotiate with the Trump administration on tariffs but wants a show of "respect" from the U.S. It also wants to include discussions of Taiwan.
In other economic news, the Commerce Department's retail sales report for March met economists' predictions for a hefty 1.4% increase as consumers front-loaded purchases ahead of coming tariffs.
Among Investor's Business Daily's 197 industry groups, three semiconductor groups were among the five worst performers on Wednesday. Gold stocks continued to lead along with oil-and-gas stocks.
In the S&P 500, Devon Energy, Marathon Petroleum and Diamondback Energy gained along with Warren Buffett's Berkshire Hathaway holding Occidental Petroleum.
12:22 p.m. ET
Three Stocks Touch Buy Zones
A few stocks tried to break out amid the larger gloom. In foreign banks, Icici Bank flirted with a buy point of 31.99 from an early stage cup-with-handle base.
Also, Relx, a provider of analytics for professionals and business customers, touched a buy zone from a double-bottom base with a 51.80 entry before pulling back slightly. Its relative strength line is at a new high as seen with the blue dot on IBD MarketSurge.
And recent initial public offering Kestra Medical Technologies cleared an entry at 26.06 but pulled back sharply.
11:06 a.m. ET
Dow Jones Stocks: Nvidia Tumbles On License Requirement
Nvidia fell 7% after the company announced that it now needs a license to export its H20 AI chip to China. Nvidia's results for its first quarter, which ends April 27, are expected to include a charge of $5.5 billion relating to the license.
Shares cleared their 21-day moving average on Tuesday but fell below that threshold in early trades Wednesday. Nvidia's Relative Strength Rating has taken a beating, falling to 52 from 98 six months ago.
How Invested In The Stock Market Should You Be Right Now?
Artificial intelligence stocks dropped along with Nvidia. Broadcom, Marvell Technology and Advanced Micro Devices tumbled between 2% and 7%. Magnificent Seven stocks Amazon, Apple, Alphabet and Meta also fell.
Among other Dow stocks, American Express dipped ahead of its earnings, due Thursday. Shares are facing resistance at the 21-day moving average and are in a downtrend.
UnitedHealth climbed as it forms a cup base with a buy point of 630.73. The health care leader also reports earnings on Thursday. But its relative strength line has fallen this week.
Insurance stock Travelers gained after it reported first-quarter results. Revenue of $11.8 billion beat views of $10.8 billion. Earnings per share of $1.91 blew past estimates for 79 cents.
Travelers shares moved past their 50-day moving average within a long flat base that has a buy point of 269.56. The stock led the Dow on Wednesday.
Stock Market Today: ASML Falls, Netflix Inches Lower
Elsewhere, chip lithography gear maker ASML fell on a lowered sales outlook. Sales of $8.77 billion and earnings of $6.80 a share beat analyst views for $6.16 in earnings per share on sales of $8.32 billion. For the current quarter, analyst estimates stood at $9.5 billion. ASML predicts $8.47 billion revenue at the midpoint.
Netflix wavered in a double-bottom base with a buy point of 998.70 ahead of earnings on Thursday. The relative strength is at a new high as seen in the blue dot on IBD MarketSurge. Netflix also has an ideal Composite Rating of 99 while its Relative Strength Rating of 96 is also in the upper echelon.
Finally, Tesla skidded after a two-day win. The stock is finding it difficult to get past its 21-day moving average.
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