U.S. stock markets experienced a significant downturn following Federal Reserve Chairman Jerome Powell's speech, which dashed hopes for an interest rate cut. The three major indices closed sharply lower, with the Nasdaq dropping over 500 points or 3.07%, the Dow Jones Industrial Average falling nearly 700 points or 1.73%, and the S&P 500 declining by 2.24%.
Technology giants saw substantial losses, with Tesla (TSLA) down 4.94% and Apple (AAPL, Financial) dropping 3.89%. Chip stocks were heavily impacted as well, with NVIDIA (NVDA) falling nearly 7% and AMD (SMCI) dropping over 7%, while the Philadelphia Semiconductor Index declined by 4.1%.
Chinese stocks listed in the U.S. also suffered, with the Nasdaq Golden Dragon China Index closing down 2.72%. Meituan fell nearly 8%, JD.com declined over 5%, and both Alibaba and Xiaomi dropped more than 4%.
Powell emphasized the Federal Reserve's focus on preventing tariff-driven price increases from escalating into long-term inflation, indicating no urgency to adjust the benchmark policy rate. He warned about the potential inflationary impact of President Trump's tariffs and the heightened uncertainty facing the U.S. economy.
