Powell's Remarks Spark 3.07% Nasdaq Plunge, 2.24% S&P 500 Drop

Jerome Powell, the Chair of the Federal Reserve, made a significant statement that sent ripples through the financial markets. Powell explicitly denied that the Federal Reserve would intervene to bail out the market, a stance that was met with a sharp decline in US stocks. The remarks came as investors were already grappling with concerns over economic growth and inflation, exacerbated by the ongoing trade tensions and tariff policies.

Powell's comments highlighted a "sharp decline" in the sentiment of both households and businesses regarding the economic outlook. This pessimism was largely attributed to the uncertainty and potential negative impacts of the tariffs imposed by the US administration. The Federal Reserve Chair acknowledged that the tariffs announced so far had been "significantly larger than anticipated," suggesting that further economic challenges could be on the horizon.

The market reaction was swift and decisive. All three major US stock indices ended the day in the red, with investors offloading tech stocks in particular. This sell-off underscored the market's sensitivity to Powell's remarks and the broader economic concerns. The Nasdaq plunged by 3.07%, the S&P 500 plummeted by 2.24%, and the Dow dropped by 1.73%. The seven tech giants experienced a general decline, with Nvidia falling by nearly 6.9% and Tesla dropping by nearly 5%.

The crypto market, however, showed a degree of independence from the traditional financial markets. Despite the turmoil in the stock market, the crypto market remained relatively stable, indicating that investors in this space may be less influenced by the Federal Reserve's policies and the broader economic outlook. Bitcoin briefly plummeted after Powell's speech, but quickly rose back above $84,000, currently priced at $84,227, up by 0.8% in the past 24 hours. Most altcoins saw gains, but the market sentiment is cautious, with investors wary of whether they will be affected by the potential spread of overall economic risks in the future.

Powell's denial of a market bailout by the Federal Reserve was a clear signal that the central bank would not intervene to prop up the markets. This stance aligns with the Federal Reserve's long-standing policy of maintaining independence from political pressures and focusing on its dual mandate of maximum employment and stable prices. The market's reaction to Powell's remarks underscores the importance of the Federal Reserve's role in shaping economic expectations and investor behavior.

The economic outlook remains uncertain, with concerns over slowing growth and persistent inflation. Powell's comments have added to the market's jitters, as investors grapple with the potential impacts of tariffs and the Federal Reserve's policy stance. The crypto market's resilience in the face of these challenges suggests that it may offer a hedge against traditional market volatility, although it is important to note that the crypto market is subject to its own set of risks and uncertainties.

In the volatile foreign exchange market, the U.S. dollar index expanded its decline after Powell's speech, with a daily decline of slightly over 1%. The U.S. announced new sanctions on Iranian oil exports, causing crude oil to rebound by nearly 2% to a near two-week high. Gold prices maintained an upward trend throughout Wednesday, with spot gold rising by nearly 3.5% intraday, setting a new historical record.