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Powell's Remarks Spark 700-Point Dow Drop, Rate Cut Hopes Fade

Market IntelWednesday, Apr 16, 2025 8:01 pm ET
1min read

Federal Reserve Chairman Jerome Powell's recent remarks have dampened market expectations for a rate cut, leading to a significant sell-off in U.S. equities. The Dow Jones Industrial Average plummeted by nearly 700 points, marking a substantial decline in the market.

Powell's speech underscored the Federal Reserve's commitment to preventing tariff-driven inflation from becoming a more persistent issue. This stance aligns with Powell's previous statements, indicating that the Federal Reserve is not in a hurry to adjust its benchmark policy rate. Powell warned that President Trump's tariffs could temporarily boost inflation and that these effects might linger for an extended period.

Powell highlighted the high level of uncertainty facing the U.S. economy, noting the risks of rising unemployment and inflation. He emphasized that the Federal Reserve will assess the potential impacts of policy changes and observe economic behavior to formulate monetary policy in a way that best achieves its mandate. Powell also stated that it is too early to adjust monetary policy in response to tariff increases, as the economic impacts remain uncertain in terms of scale and duration.

In response to Trump's previous comments about replacing Powell, the Federal Reserve Chairman reiterated that the central bank's independence is enshrined in U.S. law and that its officials cannot be removed without cause. Powell's remarks have led to a shift in market expectations, with the probability of the Federal Reserve maintaining rates unchanged in May rising to 83.2%. The likelihood of no rate change by June stands at 32.8%, while the probability of a cumulative 25 basis point cut is 57.0%, and a 50 basis point cut is 10.2%.

Major technology stocks experienced a collective decline, with tesla falling by 4.94% and apple by 3.89%. Chip stocks also took a hit, with nvidia dropping nearly 7%, amd falling over 7%, and the Philadelphia Semiconductor Index declining by 4.1%. Chinese companies listed in the U.S. also saw significant drops, with the Nasdaq Golden Dragon China Index falling by 2.72%. meituan dropped nearly 8%, JD.com fell over 5%, and Alibaba and Xiaomi both declined by more than 4%.

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Monkiyness
04/17
Fed's keeping rates steady? No problem. Problem is, where are the growth catalysts coming from now?
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Janq55
04/17
Powell's hawkish tone spooked the market. But hey, buy the dip? Or is it just another trap?
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Neyo_708
04/17
@Janq55 Are you thinking of adding any stocks to your bag?
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moneymonster420
04/17
Rate cut hopes fading like my hairline. What's next, holding cash in a mattress?
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whiteiversonyeet
04/17
Tech took a nosedive—rate cut hopes fading fast. Time to rethink portfolios and adjust for the new reality.
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ItsCrypticYT
04/17
@whiteiversonyeet What's your plan?
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getintocollegern
04/17
Holding $TSLA long-term; volatility is temporary 🤔
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alvisanovari
04/17
Tech stocks tanking; time to buy the dip?
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Serious_Procedure_19
04/17
Market drop overblown; looking for opportunity here.
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Keroro999
04/17
Fed's hawkish shift, but still bullish on semis.
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ethereal3xp
04/17
@Keroro999 What makes you bullish on semis?
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pfree1234
04/17
Rate cut hopes fading like my hairline.
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surveillance_raven
04/17
Powell's hawkish tone = bearish market vibes.
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ItsCrypticYT
04/17
@surveillance_raven What's your take on tech stocks now?
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Ok_Statement1056
04/17
@surveillance_raven Totally agree, market's shaky.
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iReza-
04/17
Holy!The TSLA stock generated the signal signal, from which I have benefited significantly!
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Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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