U.S. Stock Market Close: Powell's Hawkish Remarks Devastate the Market, All Three Major Indices Plunge, Nasdaq Drops Over 3%

On Wednesday Eastern Time, the three major indices collectively plummeted, with the Nasdaq leading the decline with a drop of over 3%, influenced by hawkish remarks from Fed Chairman Powell.

(Minute-line chart of the three major indices, source: TradingView)

At the close, the Dow Jones fell 1.73% to 39,669.39, the S&P 500 dropped 2.24% to 5,275.70, and the Nasdaq declined 3.07% to 16,307.16.

Powell warned on Wednesday that US President Trump's tariff policies could put the Fed in a dilemma between "controlling inflation" and "supporting economic growth."

He hinted that the Fed would prioritize controlling inflation, reiterated a wait-and-see stance, and denied the so-called "Fed put" (i.e., the Fed would intervene during market crashes).

Before Powell's speech, US stocks were already declining, and the losses expanded further afterward. Analysts commented, "People expected Powell to remain neutral, but he showed a hawkish tilt."

Nvidia's stock price plummeted 6.9% as the US government imposed new restrictions on its chip exports.

Other chip stocks also followed suit, with the VanEck Semiconductor ETF falling over 4%. AMD dropped 7.4%, and Micron Technology slid 2.4%.

ASML, the lithography giant, released disappointing earnings, with its stock plunging 7%, further exacerbating the chip sector's decline.

Zachary Hill, portfolio manager at Horizon Investments, stated, "The S&P 500 is now more reliant on the tech sector than ever before."

He noted that tech stocks' influence on market movements "can both lift the index and amplify declines," leading the rebound last week but reversing this week.

Since April 2, when the Trump administration first announced "reciprocal" tariffs, the S&P 500 has fallen about 7%, the Nasdaq has dropped 7.4%, and the Dow has declined around 6%.

Hot Stock Performance

Major tech stocks collectively closed lower: Apple fell 3.89%, Microsoft dropped 3.66%, Nvidia declined 6.87%, Google slid 1.91%, Amazon decreased 2.93%, Meta fell 3.68%, and Tesla dropped 4.94%.

Popular Chinese stocks mostly fell, with the Nasdaq Golden Dragon China Index down 2.72%. Alibaba dropped 4.93%, JD.com fell 5.64%, Pinduoduo declined 1.83%, NIO decreased 2.76%, XPeng Motors fell 5.55%, Li Auto dropped 3.03%, Bilibili slid 3.52%, Baidu decreased 2.42%, NetEase fell 0.63%, and Tencent Music dropped 3.60%.

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