U.S. stock markets took a sharp hit today following comments from Federal Reserve Chair Jerome Powell, who warned that the economic consequences of recently introduced tariffs may be more severe and longer-lasting than previously anticipated. Powell expressed serious concerns about the potential for extended disruptions, particularly in the automotive sector, noting that supply chains for car companies could be affected “for years.”

His remarks immediately triggered a negative reaction from investors, with all major indices posting significant losses. The S&P 500 fell below the critical 5,300 level, signaling broad unease across the market. The tech-heavy Nasdaq Composite was hit the hardest, plunging 3% and now trading at 16,316—down more than 500 points. The Dow Jones Industrial Average also declined sharply, losing 1.75% to trade at 39,661.

Investors appeared spooked by the implications of Powell’s warning, which suggested not only short-term volatility but also deeper structural challenges for key sectors of the U.S. economy. The automotive industry, in particular, may face prolonged difficulties in reconfiguring supply chains, potentially leading to inflationary pressure, reduced production, and downward earnings revisions.

Powell’s tone added to growing concerns that persistent trade tensions and geopolitical uncertainty could slow economic growth at a time when the Federal Reserve is already navigating a delicate balancing act between controlling inflation and supporting recovery.

Disclaimer:

This article is for informational purposes only and does not constitute financial or investment advice. Market conditions are subject to rapid change. Readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions.