Stocks opened lower Wednesday and stayed there through the close. A strong March retail sales report could not quiet investors' skittishness and selling accelerated after Federal Reserve Chair Jerome Powell said that the central bank remains in no rush to cut rates.
Ahead of the opening bell, the Census Bureau said that retail sales rose 1.4% month over month in March – a notable jump from February's 0.2% increase and the biggest monthly gain since January 2023.
The impressive growth was driven by a 5.3% month-over-month increase in sales of cars and auto parts. Excluding these, retail sales were up 0.5%.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
While today's solid retail sales report would typically "be a good thing for markets, it is very possible that consumers are front-loading their purchases and we may be seeing an artificial bump in sales," says Chris Zaccarelli, chief investment officer for Northlight Asset Management.
The front-loading of purchases came in the lead-up to President Donald Trump's Liberation Day, where he announced sweeping retaliatory tariffs, and sparked a historical stock market sell-off. Most of these tariffs have since been paused, but only temporarily.
Zaccarelli notes that the "uncertainty over tariff policy may be causing even more damage than any policies" that the Trump administration may eventually implement.
Powell talks rate cuts in speech today
Uncertainty over the Trump administration's plans for tariffs and how that's impacting the markets isn't keeping Fed Chair Powell up at night.
In a Q&A session at the Economic Club of Chicago this afternoon, Powell said that "markets are doing what they're supposed to do," and that the Fed will not intervene if the stock market plummets.
Powell also said that while the economy is "moving away" from the central bank's dual mandates for price stability and full employment, the Fed is "well-positioned to wait for greater clarity" before making changes to current monetary policy. In other words, it's in no hurry to cut interest rates prematurely.
This was certainly not what market participants wanted to hear. At the close, the blue chip Dow Jones Industrial Average was down 1.7% at 39,669, the broader S&P 500 was off 2.2% to 5,275, and the tech-heavy Nasdaq Composite was 3.1% lower at 16,307.
Nvidia leads tech stocks lower
All but one of the 11 S&P 500 sectors finished lower today – energy being the outlier.
And tech stocks bore the brunt of the selling after artificial intelligence (AI) chipmaker Nvidia (NVDA) late Tuesday said it will incur a $5.5 billion charge in its first-quarter results.
This is after the U.S. government told the chipmaker that it will need new licenses to export its H20 processors to China and other countries.
"While NVDA has historically adapted to export controls by developing China-specific products, we estimate that this development puts about 8% to 10% of the company's revenue tied to China servers at risk," says CFRA Research analyst Angelo Zino.
Nvidia stock fell 6.9% today, losing $188 billion in market value. For context, this is the entire market cap of blue chip stock Verizon Communications (VZ, -2.0%).
Fellow chip stocks Advanced Micro Devices (AMD, -7.4%) and Broadcom (AVGO, -2.4%) also sold off.
Related content
- What Stocks Are Politicians Buying and Selling?
- Is the Stock Market Open on Good Friday in 2025?
- Ray Dalio Is Ringing Alarm Bells About 'Something Worse Than a Recession'
-
Stock Market Today: Have We Seen the Bottom for Stocks?Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
-
Stock Market Today: Have We Seen the Bottom for Stocks?
Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Social Security Is Taxable, But There Are WorkaroundsIf you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
-
Serious Medical Diagnosis? Four Financial Steps to TakeA serious medical diagnosis calls for updates of your financial, health care and estate plans as well as open conversations with those who'll fulfill your wishes.
-
What Wall Street's CEOs Are Saying About Trump's TariffsWe're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
-
To Stay on Track for Retirement, Consider Doing ThisWriting down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
-
How to Make Changing Interest Rates Work for Your RetirementHigher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
-
When to Sell Your StockKnowing when to sell a stock is a major decision investors must make. While there's no one correct answer, we look at some best practices here.
-
Within Five Years of Retirement? Five Things to Do NowIf you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
