US stocks were mixed Thursday as President Donald Trump touted trade deal progress with Europe and China and investors digested a threat from the president to fire Federal Reserve Chair Jerome Powell. Stocks initially wavered Thursday morning after Trump called for Powell’s “termination” for not cutting interest rates fast enough — a criticism he has levied multiple times in a long-standing feud between the president and the Fed chair. However, markets shrugged off the jab at Powell and got a boost in the afternoon as Trump said there will “100%” be a trade deal with the European Union and a “very good deal” with China. Investors have been on alert for progress in trade talks during the 90-day pause on most “reciprocal” tariffs. “Oh, there will be a trade deal, 100%,” Trump told reporters during a meeting with Italian Prime Minister Giorgia Meloni. “Of course there will be a trade deal. They want to make one very much. We’re going to make a trade deal. I fully expect it. But it’ll be a fair deal.” Trump also said he’s not worried about US allies turning to China due to his tariffs. “Nobody can compete with us,” Trump said. “Nobody.” “I think that you will see we’ll make a very good deal with China,” he added. The Dow fell 527 points, or 1.33%. The broader S&P 500 held on to its gains and edged higher by 0.13% after dipping into the red in the morning. The tech-heavy Nasdaq Composite fell 0.13% after fluctuating between gains and losses. All three major indexes were coming off back-to-back days of losses and finished the week in the red. Trading in the US will be closed Friday in observance of Good Friday. Dow futures had dropped steeply Thursday morning as Trump posted on social media lambasting Powell. The Dow was also dragged lower by UnitedHealth Group (UNH), which sank 22.38% after the health care giant cut its profit forecast for this year. The Dow is weighted by share prices, and UnitedHealth has a significant influence on the index’s performance. “Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’” Trump posted on social media. “Powell’s termination cannot come fast enough!” Trump on Thursday told reporters at the White House that Powell would “leave” if he asked him to. Trump then ignored a follow-up question on whether he is trying to remove Powell. “Fed independence is more important than ever at a time when there is risk to underlying inflation and inflation expectations from Trump tariff inflation, and global portfolio reallocation out of the US at the margin amid erratic US decision-making,” said Krishna Guha, vice chairman at Evercore ISI, in a Thursday note. Powell said Wednesday at an economic event in Chicago that Trump’s tariffs are unlike anything in modern history, with the potential to stoke inflation and drag on economic growth, complicating the Fed’s job and the outlook for the economy. That led to a rapid selloff on Wednesday, with the Dow closing 700 points lower, or 1.73%. The S&P 500 fell 2.24% and the Nasdaq Composite closed 3.07% lower. “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said. ‘Trade policy uncertainty is literally off the charts’ Investors this week also digested earnings results for the first quarter. Companies on earnings calls have said that uncertainty makes it extraordinarily difficult to plan ahead. United Airlines (UAL) this week offered two versions of guidance: one for a recession scenario, and one for a non-recession, “stable” scenario. “It’s really difficult to have conviction today with the humongous uncertainty in the economy and in trade policy,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “Recent developments are a reminder that market swings are likely until there is greater certainty over the outlook for tariffs,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, in a Thursday note. A new International Monetary Fund report to be released next week will include “notable markdowns” in economic growth forecasts, Kristalina Georgieva, the IMF’s managing director, said in a speech Thursday. “Financial markets volatility is up. And trade policy uncertainty is literally off the charts,” Georgieva said. Alphabet (GOOG), Google’s parent company, slid 1.38% Thursday after a federal judge ruled that Google has illegally built “monopoly power” with its web advertising business. Nvidia (NVDA) slid 2.87% Thursday after tumbling 6.87% on Wednesday. The chipmaker on Tuesday said it would take a $5.5 billion hit because the US government imposed fresh export restrictions on the the sale of its H20 chips to China. Advanced Micro Devices (AMD), another chipmaker, said in a regulatory filing this week it could take an $800 million hit because of similar export restrictions. Dan Ives, analyst at Wedbush Securities, said in a Thursday note that there has been “much angst in the market” since Trump unveiled his plan for “reciprocal” tariffs on April 2. “This week were the first shots fired in the trade war in the tech world as the White House has essentially blocked Nvidia from selling its key H20 chips to China,” Ives said. Mohit Kumar, chief economist and strategist for Europe at Jefferies, said in a note: “We are staying sway from Big Tech as we believe that it could be used as a leverage in trade talks.” Stock futures had gained overnight as investors enjoyed a moment of relative calm. Trump posted on social media Wednesday afternoon that he had met with the Japanese delegation on trade. “Big Progress!” Trump wrote. Trump on Thursday morning said he had a “very productive call” with Mexico President Claudia Sheinbaum on Wednesday. “Likewise, I met with the highest level Japanese Trade Representatives,” Trump wrote. “It was a very productive meeting. Every Nation, including China, wants to meet! Today, Italy!” The yield on the 10-year Treasury rose to 4.326%, up from Wednesday. The US dollar index was relatively unchanged after sliding to a three-year low on Wednesday. The European Central Bank on Thursday cut its main interest rate as Trump’s tariffs portend to impact the region’s economy. Europe’s benchmark STOXX 600 index was down 0.13%. Oil settled higher on Thursday after the Treasury Department on Wednesday issued fresh sanctions on Iranian oil and Trump on Thursday indicated a potential trade deal with the EU, boosting demand prospects. US oil rose 3.54% to settle at $64.68 a barrel. Brent crude, the global benchmark, gained 3.2% to $67.96 a barrel.
Stocks close out choppy day after Trump calls for ousting Fed Chair Powell
TruthLens AI Suggested Headline:
"U.S. Stocks Show Mixed Results Amid Trump's Criticism of Fed Chair Powell"
CNN
7.6
TruthLens AI Summary
On Thursday, U.S. stocks experienced a mixed performance amid President Donald Trump's comments regarding trade negotiations and his ongoing criticism of Federal Reserve Chair Jerome Powell. Early in the day, markets reacted to Trump's call for Powell's termination due to his perceived failure to cut interest rates quickly enough, a sentiment Trump has expressed multiple times in their contentious relationship. Despite the initial market jitters following Trump's social media post, which described Powell as 'always TOO LATE AND WRONG,' stocks rebounded later in the day as Trump expressed confidence in securing a trade deal with both the European Union and China. He stated unequivocally that there would '100%' be a deal with the EU and characterized the anticipated agreement with China as 'very good.' Investors have been particularly attentive to trade developments during the current pause on tariffs, hoping for clarity that could stabilize the market.
The Dow Jones Industrial Average fell by 527 points, or 1.33%, largely influenced by a significant drop in UnitedHealth Group's stock after the company lowered its profit forecasts. Meanwhile, the S&P 500 managed to gain slightly, up 0.13%, while the tech-heavy Nasdaq Composite saw a minor decline of 0.13%. Analysts noted that the uncertainty surrounding trade policies and economic forecasts is causing heightened market volatility. Federal Reserve Chair Powell had previously warned that Trump's tariffs could stoke inflation and complicate the Fed's economic outlook. As investors processed quarterly earnings reports, many voiced concerns about the challenges of making business decisions amid such uncertainty. The International Monetary Fund is expected to release a report that will likely downgrade economic growth forecasts, further highlighting the precarious economic landscape. Overall, the day's trading reflected a blend of optimism regarding trade deals countered by fears of inflation and economic instability stemming from ongoing tariff disputes.
TruthLens AI Analysis
The news piece highlights the volatile nature of the stock market in response to President Donald Trump's comments regarding Federal Reserve Chair Jerome Powell and progress in trade negotiations with the EU and China. The article illustrates the complex interplay between political statements, market reactions, and investor sentiment.
Market Reactions to Political Statements
Trump's threats to terminate Powell for not lowering interest rates quickly enough underscore the tension between the executive branch and the Federal Reserve. The mixed performance of the stock market, with significant fluctuations, reflects how investors are reacting to both the president's remarks and the ongoing trade discussions. Notably, the Dow Jones Industrial Average saw a significant drop, influenced by Trump's comments and the poor performance of UnitedHealth Group, which further added to the market's instability.
Implications of Trade Negotiations
The president's assertion of a "100%" guarantee for a trade deal with the EU and a "very good deal" with China aims to reassure investors. However, this optimism comes amidst a backdrop of uncertainty, particularly regarding tariffs and their impact on international relations. Trump's comments suggest a belief in American economic supremacy, which could influence investor confidence, albeit with a degree of skepticism given the current economic climate.
Potential Hidden Agendas
There could be an underlying strategy to divert attention from domestic economic issues by focusing on trade and the Federal Reserve. By attacking Powell, Trump may be attempting to shift the narrative around economic performance and Federal Reserve policy, possibly to mitigate criticism of his administration's handling of economic challenges.
Trustworthiness of the News
The article presents a balanced view of the circumstances, detailing both Trump’s statements and their effects on the stock market. However, the framing of the president’s comments might lead to a perception of manipulation, particularly in how his words are positioned against market performance. The extent to which the news could be considered manipulative depends on the interpretation of Trump's motivations and the timing of his comments relative to market movements.
Societal and Economic Impact
This news could influence public perception of both the stock market and the effectiveness of Trump's economic policies. It may also affect investor behavior, as uncertainty surrounding interest rates and trade deals could lead to volatility in the markets. Furthermore, the focus on Powell could lead to calls for changes in the Federal Reserve’s leadership should the economic situation deteriorate.
Audience and Support Base
The article is likely to resonate with audiences who are concerned about economic policies, financial markets, and the implications of political decisions on the economy. Those supportive of Trump's administration may view his remarks as assertive leadership, while opponents could see it as an attempt to undermine independent institutions like the Federal Reserve.
Impact on Global Markets
The news holds significance for global markets as it reflects the U.S.'s stance on trade and monetary policy, which can have ripple effects worldwide. Stocks, particularly in the healthcare sector due to UnitedHealth's performance, may face increased scrutiny, influencing investor decisions in related industries.
Relevance to Current Affairs
Trump's comments tie into broader discussions about U.S. economic policy and international trade, making this news relevant to current global political and economic dynamics. The tensions between the U.S. and its trading partners, along with domestic economic challenges, are critical issues in today's discourse.
Possibility of AI Influence
While it's uncertain if AI was specifically used in the drafting of this article, certain AI models could assist in summarizing complex information or generating content based on existing data. If AI influenced the narrative, it may have shaped the emphasis on specific phrases or themes, potentially guiding the audience's perception.
Given the nature of the article and the context it presents, the reliability of the information is moderately high, though it remains essential to consider the potential biases inherent in political and economic reporting.