Markets React to Fed Chair’s Tariff Warning
US stocks saw mixed performance on Thursday following a steep drop the previous day. The Dow Jones Industrial Average fell 1.1%, shedding over 500 points. The S&P 500 gained 0.4% and the Nasdaq Composite rose 0.6%.
Investors assessed remarks from Federal Reserve Chair Jerome Powell and tracked corporate earnings. Powell warned that tariffs could raise inflation and slow economic growth. He said the central bank would “wait for greater clarity” before adjusting interest rates.
Figure 1: US Markets as on 10:58 AM EDT
Powell addressed the economic impact of trade policies during a speech in Chicago. He described a “challenging scenario” emerging from prolonged tariff pressures. The Fed does not plan immediate policy changes in response to the uncertainty.
UnitedHealth Shares Tumble, Drag Dow Lower
UnitedHealth shares dropped as much as 19% in early trading. The health insurer cut its full-year profit forecast due to higher-than-expected medical costs. UnitedHealth remains the largest component of the Dow Jones Industrial Average by weight.
The company cited rising demand for health services under Medicare plans as a key driver of costs. The announcement triggered a broad sell-off across the healthcare sector. Humana fell 13%, Elevance Health declined 9%, and CVS Health dropped 7%.
Figure 2: UnitedHealth Group Inc shares tumble as on 10:48 AM EDT
Centene shares also dropped 8% as investor sentiment weakened across the industry. UnitedHealth’s forecast revision set the tone for the sector’s performance in the current earnings season.
Tech Stocks Recover After Sharp Sell-Off
Tech stocks rebounded Thursday following a sharp sell-off on Wednesday. Nvidia shares stabilised after falling due to new US restrictions on sales to China. The chipmaker faces additional export controls affecting its AI and data centre products.
Nvidia shares remained flat despite the prior day’s drop. AMD shares edged higher as market sentiment improved slightly. Taiwan Semiconductor reported a 60% rise in first-quarter net profit. Strong AI chip demand drove TSMC’s growth beyond expectations.
TSMC shares climbed 3% on the positive earnings report. The chipmaker noted continued global demand for high-performance computing applications.
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Trump Criticises Fed Chair Over Rates
President Donald Trump criticised Jerome Powell on social media Thursday. He accused the Fed Chair of acting “too late” on interest rates. Trump wrote that Powell’s recent report was a “complete mess.”
He claimed the European Central Bank plans its seventh rate cut while the Fed delays action. Trump also said “Too Late Jerome Powell” should have reduced rates earlier. He demanded immediate action and suggested Powell’s removal.
Trump insisted the US benefits from tariffs and claimed prices are falling, including oil and groceries. Powell maintained the Fed would wait for clearer trade signals before altering policy.
Netflix and Amex Results in Focus
Netflix is scheduled to release its quarterly results after market close. Investors anticipate strong performance amid ongoing volatility in tech stocks. Netflix has become a focal point as other tech giants face trade pressures.
American Express reported a 6% increase in quarterly profit. Amex earned $2.58 billion or $3.64 per share, beating estimates of $3.48 per share. Revenue reached $16.96 billion, slightly exceeding forecasts.
Figure 3: Amex revenue reached $16.96 billion, slightly exceeding forecasts
CEO Stephen Squeri said, “Our performance across key areas, including card member spending, customer retention, demand for our premium products and credit performance, continued to be strong across our customer base, consistent with and in many cases better than what we saw in 2024.”
The results suggest continued spending by affluent customers despite economic concerns tied to trade.
Housing Starts Decline Amid Market Uncertainty
US housing starts fell in March as builders pulled back amid cost pressures. Residential construction dropped 11.4% to a seasonally adjusted rate of 1.324 million units. Economists had expected 1.42 million.
Single-family housing starts fell 14.2% to an annualised rate of 940,000. The spring housing season slowdown reflects rising costs and unresolved trade issues. Tariffs on materials have raised supplier prices, affecting builder plans.
Data from the National Association of Home Builders showed 60% of builders reported price hikes or expected them. Building permits increased 1.6% to 1.482 million, while mortgage rates neared 7%, affecting buyer affordability.
Jobless Claims Fall, Continuing Claims Rise
Weekly jobless claims declined last week, according to the Labor Department. For the week ending April 12, claims fell to 215,000. This figure came in below the 225,000 median forecast.
Continuing claims for the week ending April 5 rose by 41,000. The total reached 1.88 million, above the 1.87 million estimate. The data signals a stable labour market but reflects lingering uncertainties in economic activity.
Trending Stocks in Premarket Trading
UnitedHealth topped the list of trending tickers in premarket trade. Eli Lilly rose over 11% after positive trial results for its weight-loss pill, orforglipron. The drug reduced weight by 7.9% and lowered blood sugar in patients with type 2 diabetes.
Novo Nordisk and Viking Therapeutics shares fell more than 4% each. Hertz stock gained another 10% following a 56% jump the previous day. Bill Ackman’s Pershing Square disclosed a stake in the rental car firm, boosting confidence.
