Stocks close out choppy day after Trump calls for ousting Fed Chair Powell
April 17, 2025
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.
CNN’s Anna Cooban, Bryan Mena, Betsy Klein and Kit Maher contributed reporting.
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