Powell Sees Higher Risks of Rising Inflation, Slower Growth
25 minutes ago
America’s top central banker has the same concerns many other experts about what President Donald Trump’s “Liberation Day” tariffs will bring: higher inflation and slower economic growth.
Federal Reserve Chair Jerome Powell spoke Friday at an economic reporting conference in Virginia, giving his first reaction to Trump’s Wednesday announcement of sweeping tariffs against U.S. trading partners. The tariff announcement resolved some of the uncertainty about policy that has kept the Fed in a holding pattern in recent months, but not enough to shake Powell out of “wait-and-see” mode.
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“It is now becoming clear that tariff increases will be significantly larger than expected, and the same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Powell said. “The duration of these effects remains uncertain. While the tariffs are highly likely to generate at least a temporary rise in inflation, it’s also possible that the effects could be more persistent.”
Forecasters agree that tariffs will push up the cost of living, potentially setting off longer-lasting inflation while slowing the economy and raising the risk of a recession in the U.S.
Policymakers at the Fed are tasked with keeping inflation low and employment high. Its main tool, manipulating interest rates, can address one of those problems at a time, potentially putting the Fed in a bind if both inflation and the job market worsen at the same time. The Fed can either raise interest rates, pushing up borrowing costs to fight inflation or lower them to create easy money, boosting the economy and hiring.
For now, Fed officials have chosen to keep their key interest rate steady while waiting to see how things will play out. The waiting game will likely continue until it becomes clear whether high inflation or a collapsing labor market becomes the most urgent problem.
“What we’ve learned is that the tariffs are higher than anticipated, higher than almost all forecasters predicted,” Powell said. “We still don’t know where that comes to rest, though, and we’re just going to have to see that through.”
Boeing Stock Slides Amid Trade War Uncertainty
59 minutes ago
Boeing (BA) shares tumbled Friday as markets extended their sell-off after China’s response to the Trump administration’s new tariffs.
Boeing is a company that could be affected by both sides of the trade war, as the plane maker sources parts from around the world, manufactures its aircraft in the U.S., and exports them to airlines around the world, including in China.
The company faces other troubles, including a looming trial or revised guilty plea for defrauding the government over violations of certain safety standards. Boeing CEO Kelly Ortberg told a Senate committee this week that the company is making progress on safety reforms.
Last August, Boeing said it forecast air travel demand within mainland China could increase by 5.2% per year, making it the largest air traffic market in the world. Boeing said it projects Chinese demand for over 8,800 planes in the next two decades, 60% as the air travel industry grows and 40% to replace older planes, up from the company’s previous projections.
The tariffs could have a negative impact both ways, as Boeing bills itself as the “largest customer of China’s aviation manufacturing industry.” The company said last year that it spends $1.5 billion in China on parts, research and development, and other projects, and said some 10,000 of its planes currently have Chinese parts in them.
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Boeing shares were down about 9% in recent trading, after hitting their lowest level since October 2022. The stock has lost about a quarter of its value over the past 12 months.
Nasdaq on Track for Bear Market
1 hr 45 min ago
The Nasdaq Composite was on track to fall into a bear market on Friday as the tariff-induced global stock sell-off deepened.
The Nasdaq was recently down 4% at around 15,900 points, putting the index more than 20% off its December all-time high. The Nasdaq will have to close below 16,139.11 for a bear market to be confirmed.
The Nasdaq on Thursday had its worst day since March 2020 after President Donald Trump outlined a raft of steep tariffs that economists warn risk pushing the U.S. economy into a recession while stoking inflation.
The majority of the more than 3,000 stocks in the Nasdaq were trading in the red on Friday, but mega-cap tech stocks were weighing most heavily on the index. Shares of Apple (AAPL) were down 4% after tumbling nearly 10% yesterday, their worst day since March 2020. Chipmakers Nvidia (NVDA) and Broadcom (AVGO) were each down about 6%, while EV maker (TSLA) dropped 8%.
JPM Cuts Tesla Profit View on ‘Unprecedented Brand Damage’
2 hr 30 min ago
Telsa (TSLA) shares sank Friday as JPMorgan reduced its earnings estimates for the electric vehicle (EV) maker, citing worse-than-expected deliveries.
The analysts wrote in a note to clients that they made their determination after first-quarter deliveries were “far below even our low end estimate, confirming the unprecedented brand damage we had earlier feared.” They added that after seeing Tesla’s Q1 deliveries and production report, “we may have underestimated the degree of consumer reaction.”
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JPMorgan noted that CEO Elon Musk’s role within the Trump administration has “contributed to the controversy surrounding the Tesla brand.” The analysts explained that while reports suggested Musk may be stepping down soon, “what does seem clear, however, is that the trend in Tesla sales is worse than we and the market had appreciated.”
They now see first-quarter fiscal 2025 earnings per share (EPS) of $0.36, down from their earlier estimate of $0.40, and full-year EPS of $2.30, compared to the previous outlook of $2.35.
The analysts reiterated their “underweight” rating, saying that they “continue to see large downside” in their $120 December 2025 price target.
Tesla shares were down 8% at around $247 in recent trading. The stock has lost about 40% of its value this year.
Odds of Recession Rise on Prediction Markets
3 hr 22 min ago
Think there will—or won’t—be a recession this year? Wanna bet?
Economists and other forecasters have reworked their outlooks since President Donald Trump late Wednesday announced a fresh set of global tariffs that sent markets racing downward. Several have scaled back their forecasts for U.S. gross domestic product, while lifting their predictions regarding the likelihood of a recession—technically defined as multiple quarters of declining GDP growth.
Investors, naturally, have their own ideas. And so do bettors on prediction markets, which have lately grown in popularity including, late last year, as a means of wagering on the outcome of the election Trump eventually won. (In addition to economic events, other playable markets you can find today include ones about the New York Democratic mayoral race, the Final Four, and Elon Musk.
On Polymarket, the odds of a recession have risen from below 30% around the time of Trump’s inauguration to 56% as of earlier today. That means that, if you bet $1 on “yes,” and you’re right, you’d win $1.75, while if you bet $1 on “no,” you’d win $2.27.
The odds are a bit different on Kalshi, another prediction market. Over there, the odds of a recession were recently at 60%—meaning a correct $1 bet on “yes” will get you $2, while one on “no” will get you $3
Nike Levels to Watch After Stock Hits 7-Year Low
4 hr 25 min ago
Nike (NKE) shares have tumbled amid concerns that the Trump administration’s recently announced reciprocal tariffs could weigh on the company’s profits.
Under Washington’s new levies, Nike’s key manufacturing partners in Vietnam, Indonesia, Cambodia, and China will be subject to lofty import duties ranging from 32% to 49%, prompting worries that rising production costs and consumer prices could shrink margins and slow demand.
Nike was the biggest decliner in the Dow Jones Industrial Average on Thursday, falling 14% and closing at its lowest level since December 2017. Shares have lost 27% of their value since the start of the year, with both tariff uncertainty and a weak sales outlook pressuring the stock.
Since breaking down below the neckline of a head and shoulders pattern last June, Nike shares have continued to trend sharply lower. More recently, selling has accelerated on above-average trading volume, with the price falling decisively below the 200-month moving average to kick off April following Trump’s tariffs announcement.
While the relative strength index (RSI) confirms bearish price momentum with a reading below 50, the indicator continues tracking toward oversold territory, potentially increasing the chances of a near-term bounce.
Investors should watch crucial support levels on Nike’s monthly chart around $50 and $40, while also monitoring key resistance levels near $68 and $86.
Nike shares were down about 5% at $52.70 in recent premarket trading.
Read the full technical analysis piece here.
Major Stock Index Futures Plummet
5 hr 39 min ago
Futures tied to the Dow Jones Industrial Average were down 3%.
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S&P 500 futures were also off 3%.
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Nasdaq 100 futures dropped 3.2%.
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