Investors Lower Expectations After Powell Pointed at Rising Risk of Stagflation

Barry Adams
17 Apr, 2025
New York City

Stock market indexes edged higher on the final trading day of the week as traders attempted to recoup some of the steep losses in the previous session. 

The S&P 500 index inched up 0.1%, and the Nasdaq Composite edged up 0.2% amid lingering worries linked to the Trump tax and the health of the U.S. economy. 

Fed Chair Jerome Powell, before the Economic Club of Chicago, confirmed that a broad swathe of historic tariffs, or import taxes, are likely to revive inflationary forces. 

Powell said that tariffs are likely to stoke inflation and slow economic growth, but it is not clear where the central bank needs to focus more. 

The Federal Reserve is targeted with a dual mandate of keeping prices stable while maximizing employment. 

 “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” noted Fed Chair Powell in his prepared remarks. 

Powell provided no indication where interest rates are heading but stressed that the central bank is "well positioned to wait for greater clarity before considering any adjustments to our policy stance.”

 

U.S. Stock Movers 

UnitedHealth Group plunged 19.5% to $472.95 after the health insurance company reported weak earnings and outlook. 

The health insurance company reported first-quarter adjusted earnings of $7.29 per share on revenue of $109.58 billion. 

Moreover, the company lowered its adjusted annual earnings outlook to between $26.0 and $26.50 per share, far lower than its previous outlook of between $29.50 and $30.

Taiwan Semiconductor Manufacturing Co. Ltd. increased 3% to $156.30 after the advanced semiconductor company reported a surge in earnings in the latest quarter and retained its annual estimates. 

TSMC said revenue soared 41.6% to NT$839.25 billion and net income surged 60.3% to NT$361.6 billion. 

The company's advanced computing division expanded its share of total revenue by 7% from the previous quarter to 59%, on higher demand for artificial intelligence and 5G applications. 

Exports from Taiwan are still facing a U.S. import tax of 10%, and that could rise to 32% after the pause on the country-specific tariff ends in early July. 

NVIDIA Corp. edged up 0.2% to $104.66, and the stock rebounded from a loss of 6% in the previous session after the company booked a one-time charge of $5.5 billion because of new restrictions on its exports to China.