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Key Takeaways
- The S&P 500 lost 2.2% on Wednesday, April 16, as the Federal Reserve chair discussed possible inflationary and economic consequences of tariffs.
- Semiconductor stocks fell as major AI players Nvidia AMD anticipated charges related restrictions on chip exports from China.
- Oil prices partially recovered after recent declines. This helped lift stocks in the oil-and-gas sector.
Wednesday, major U.S. stock indexes plunged.
Jerome Powell, Federal Reserve chair, said at the Economic Club of Chicago on Tuesday that changes in U.S. trading policy could boost inflation and pressure growth. Powell noted a decline in consumer and business sentiment. He suggested that the Fed would wait for more clarity on tariff impacts before changing interest rates.
The S&P 500 ended the session 2.2% lower, while the Dow declined 1.7%. The Nasdaq was impacted by the Nasdaq’s decline of 3.1% due to the Nasdaq’s underperformance in the tech sector.
Shares of J.B. Hunt Transport Services (JBHT) skidded 7.7%, falling the furthest of any S&P 500 stock, following the logistics company’s earnings release. Although the first-quarter profits and sales exceeded expectations, executives said that tariffs are weighing on customer demand as they try to gauge how it will affect their supply chains and businesses. J.B. Hunt said that it is evaluating ways to reduce costs as it navigates through these challenges.
The top executive at marketing and corporate communications company Omnicom (OMC), has reaffirmed the firm’s plans to proceed with the acquisition of advertising giant Interpublic Group. This is despite claims that the deal may result in client losses. Both companies’ shares dropped by more than 7 percent on Wednesday.
Semiconductor stocks fell after chip giants Nvidia(NVDA)and Advanced Micro Devices(AMD) announced that they expect to incur significant charges due to the export restrictions imposed by Trump administration. Nvidia anticipates that its fiscal first quarter results will be hit by $5.5 billion. AMD, on the other hand, anticipates a charge up to $800,000,000. According to reports Nvidia H20, AMD MI308 and other chips of the same type will need export licences to be sold in China. AMD shares fell 7.4% while Nvidia shares dropped 6.9%.
Palantir Technologies (PLTR) shares declined 5.8% on Wednesday, reversing some of the strong gains notched this week after the data analytics firm struck a deal with the North Atlantic Treaty Organization (NATO) for the deployment of Palantir’s artificial intelligence (AI) military system. Stocks of other enterprise-software providers also fell amid pressure on the tech sector after Powell’s comments regarding tariffs and their potential inflationary impact.
The price of crude oil futures rose after the U.S. government announced that sanctions would be imposed on Chinese oil importers from Iran, causing increased concern about global supply. The uncertain outlook of the global economy has pushed the commodity’s prices this month. The rebound helped lift oil and natural gas stocks. Shares of exploration and production company APA Corp. (APA) led the way, with a gain of 3.2%, marking Wednesday’s top performance in the S&P 500.
Abbott Laboratories (ABT) shares jumped 2.8% after the maker of medical devices and other health care products reported better-than-expected first-quarter sales and profits. The company also reaffirmed their full-year guidance for earnings per share (EPS). It announced plans to invest $500 million in two manufacturing and research and development (R&D) facilities in Texas and Illinois that are set to open this year.
Gold prices have surged to a new record high, as the precious metal remains a safe-haven in tense geopolitical conditions. Newmont (NEM), which is the world’s biggest gold producer, saw its shares rise 2.6%.
