Today was another volatile day for stock investors as the major indices — the Nasdaq 100 (QQQ), the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA) — resumed their downward trajectory despite a promising start. This led to significantly higher than usual volumes across all three ETFs, with the SPY seeing the highest at around 150 million shares traded. For reference, the average is 64.18 million. Furthermore, the materials sector (XLB) was the biggest loser, while the financial sector (XLF) was the leader, although it also fell.
Furthermore, Federal Reserve officials are worried about President Trump’s new tariffs, which they say are much larger than expected and could slow the U.S. economy. Chicago Fed President Austan Goolsbee called the tariffs a “negative supply shock” and explained that they could push up prices while hurting growth. He said it is uncertain how quickly businesses will pass these added costs to consumers or how people might respond. As a result, Goolsbee warned that the U.S. may be heading back toward the kind of inflation the Fed has spent years trying to get under control.
San Francisco Fed President Mary Daly also said she’s “a little concerned” that the tariffs could drive inflation higher. Speaking at Brigham Young University, Daly explained that the Fed is not making any quick changes to interest rates and will wait to see more economic data. She believes that the current rate policy is still in a good place but stressed the need to move carefully in such an unpredictable situation. Although she previously saw two rate cuts as likely this year, Daly now says that depends on how the economy reacts to the tariff impact.
However, separately, at a Senate hearing, U.S. Trade Representative Jamieson Greer defended the new tariffs by saying that they are part of a bigger plan to shift the economy toward producing more goods and services. He said the U.S. is pushing for better market access in places like Japan and working with allies on things like energy and investment security. Greer also stated that no exemptions will be allowed under the new tariffs.