Markets Pop as Fed Punts on Rate Cuts—Powell Eyes Inflation and Trade Landmines

Wall Street breathes a sigh of relief as Jerome Powell & Co. kick the can down the road—again. The Dow and friends rally on steady rates, but the Fed chair’s warning about ’persistent inflation risks’ and ’trade uncertainties’ lingers like a bad aftertaste.

Funny how ’transitory’ inflation keeps getting extended like a subscription you forgot to cancel. Meanwhile, traders cheer the liquidity punchbowl staying full—until the next ’data-dependent’ rug pull.

Trade policies 

The Fed’s cautious stance comes as the Trump administration doubles down on protectionist trade policies. 

On Wednesday, former President Donald Trump told reporters he would not reduce tariffs on Chinese imports ahead of upcoming U.S.-China trade talks in Switzerland. 

“Large increases in tariffs could lead to a slowdown in growth, an uptick in long-term inflation, and an increase in unemployment,” Powell said.

Markets also reacted to a Bloomberg report that Trump’s team may lift Biden-era restrictions on AI chip exports, which boosted Nvidia shares by about 2%. 

However, Apple and Alphabet weighed on the Nasdaq, with Alphabet sliding roughly 8% after a report suggested Apple may end its default search engine partnership with Google in Safari, opting instead for its own AI-powered search tools.