Dow Jones slides 300 points as Powell tempers rate cut expectations amid tariff concerns
Stocks fell Wednesday as Federal Reserve Chair Jerome Powell dashed hopes for near-term interest rate cuts, indicating the central bank is still evaluating the inflationary impact of higher tariffs imposed by President Donald Trump.
The S&P 500 lost 0.3% after gaining 0.4% earlier in the day. The Dow Jones Industrial Average sank 0.7%, shedding 300 points, while the Nasdaq Composite declined 0.1%.
Powell, speaking after the Fed’s July policy meeting, said the committee has “made no decisions” about adjusting rates in September, noting that while tariffs are increasingly influencing prices, their broader effect on inflation and economic activity remains uncertain.
“Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects remain to be seen,” Powell said.
“Our obligation is to keep longer-term inflation expectations anchored and prevent a one-time price increase from becoming a persistent issue.”
Despite leaving rates unchanged — as widely expected — the Fed’s decision wasn’t unanimous. Governors Michelle Bowman and Christopher Waller dissented, each supporting a 0.25-point rate cut.
Investment strategist Ryan Weldon of IFM Investors described the dissents as “highlighting the fracturing view of potential tariff impacts on the economy and inflation.”
Markets initially rose on a stronger-than-expected GDP report, which reassured investors about economic resilience in the face of rising tariffs. But Powell’s remarks reversed sentiment, dragging consumer-focused stocks such as Home Depot lower.
It marked a second straight day of losses for Wall Street, following a week of record highs.
Major Index Performance — July 30
| Index | Change | % Move |
|---|---|---|
| S&P 500 | −14 pts | −0.3% |
| Dow Jones Industrial Average | −300 pts | −0.7% |
| Nasdaq Composite | −15 pts | −0.1% |
Source: Market data compiled from closing figures.