Stock Market Today: Stocks tumble as Powell adds to trade war concerns

U.S. stocks moved firmly lower in early Wednesday trading, with the dollar slumping to a fresh three-year trough amid the latest trade war salvo in the tech sector and further flight-to-safety trades that suggest more market uncertainty over the coming weeks.

Updated at 1:49 PM EDT

Powell - no hurry not to be an hurry

Federal Reserve Chairman Jerome Powell warned investors that the impact of Trump administration tariffs will be larger than first expected, and likely stoke near-term inflation pressures that could persist. 

Speaking at an economic event in Chicago, Powell said that, "despite heightened uncertainty and downside risks, the U.S. economy is still in a solid position", adding that as he and his colleagues "learn more, we will continue to update our assessment" and judge any potential monetary policy response. 

"Tariffs are highly likely to generate at least a temporary rise in inflation .... the inflationary effects could also be more persistent," Powell said. 

"Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and, ultimately, on keeping longer-term inflation expectations well anchored," he added. 

Stocks extended declines following his remarks, with the S&P 500 last marked 115 points, or 2.14% lower on the day, with the Nasdaq down nearly 545 points, or 3.23%. The Dow was last off 592 points.

BREAKING: The S&P 500 falls below 5300 as Fed Chair Powell says the economic impact of tariffs will be larger than expected. pic.twitter.com/tkwADww5Xk— The Kobeissi Letter (@KobeissiLetter) April 16, 2025

Updated at 11:48 AM EDT

GDP Meh ... 

A stronger-than-expected reading for March retail sales hasn't had much affect on the Atlanta Fed's GDPNow tracker, which pegged its first quarter contraction estimate at 2.2%, a modest improvement from the -2.4% update from last week.

Retail sales rose by 1.4% to just under $740 billion, but the tally was likely flattered by buyers looking to lock-in big-ticket purchases ahead of the expected hit from Trump administration tariffs. Auto and car part sales surged 5.3% on the month, a tally that normally reflects year-on-year gains, while the control group reading rose just 0.4%. 

That leaves the GDP-feeding calculation basically flat for the first three months of the year.

On April 16, the #GDPNow model nowcast of real GDP growth in Q1 2025 is -2.2%. The alternative model forecast, which adjusts for imports and exports of gold, is -0.1%: https://t.co/T7FoDdgYos. #ATLFedResearch

Download our EconomyNow app or go to our website for the latest… pic.twitter.com/tVJmyQI3C5— Atlanta Fed (@AtlantaFed) April 16, 2025

Updated at 10:46 AM EDT

The cloudy skies

United Airlines  (UAL)  is a surprise earlier gainer after the carrier posted stronger-than-expected first quarter earnings late Tuesday and said travel demand largely holding up amid the broader economic uncertainty. 

The group posted its best first quarter bottom line in five years, with record revenues of $13.2 billion, adding that 'forward bookings over the last two weeks have remained stable, with premium cabins up 17% and international up 5% year-over-year."

United also issued forward guidance based on its its initial assessment from earlier this year, a stable demand environment and one that factors in the risk of recession. 

United Airlines shares were marked 2.1% higher on the session at $68.42 each, but remain nearly 30% south of their end-of-year levels in 2024.

Can't say i've ever seen a company do this, but it's logical. cover all your bases no matter what the outcome of the economy. $UAL pic.twitter.com/BuV89zqe7W— RealSimpleAriel (@ReaSimpleAriel) April 16, 2025

Updated at 9:39 AM EDT

Soft open

The S&P 500 was marked 52 points, or 0.96% lower in the opening minutes of trading, with the Nasdaq down a larger 290 points, or 1.72% with Nvidia falling 5.5%.

The Dow fell 160 points and the Russell 2000 slipped 7 points, or 0.38% following the stronger-than-expected retail sales data.

"Today’s numbers showed consumers were still spending in March, but we won’t know for another month whether they continued to open their wallets after tariffs were announced," said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. 

"The rules of the game changed on April 2, and it’s impossible to run a pre-tariff economic playbook in a post-tariff world," she added.

S&P 500 Opening Bell Heatmap (Apr. 16, 2025)$SPY -0.89%