Trading results for 16 April 2025
Powell is joking, but investors are not in the mood – so they sell, sell and sell again. That is how trading went on Wednesday: it started off weak and ended on a thoroughly discouraging note. The trigger for yet another sell-off was new export restrictions on advanced chips from leading U.S. semiconductor companies, especially the sector leader Nvidia (NVDA, -6.87%).
Yesterday, shares of this chip giant were hit by massive selling, which inevitably affected its competitors. As a result, stocks of both the ‘Magnificent Seven’ (Mag7) and companies in the semiconductor segment plunged into the red and dropped sharply with no signs of support. Average losses across the tech sector totalled 3.53% for the day.
Macroeconomic data on retail sales, which turned out slightly better than analysts expected, did little to cheer the market. Investors seem to be paying little attention to macro figures and are instead more focused on signals coming from the White House and Donald Trump’s social network, Truth Social.
And those were not the only troubles on Wednesday. Towards the end of the main trading session, Federal Reserve Chair Jerome Powell spoke at the Economic Club of Chicago. He noted that “the level of tariff increases announced so far is significantly larger than anticipated, and the same is likely to be true of the economic effects, which will include higher inflation and slower growth.” Powell also added that the Fed would wait for greater clarity before considering any changes to monetary policy.
These remarks were not well received by market participants. But what caused the greatest irritation was Powell’s sarcastic joke that stock markets are falling because of weak share prices. That quip only accelerated the sell-off, and only a minor rebound at the very end of the session helped avoid a full-scale rout.
Still, the drop was substantial, with daily losses ranging from 1.73% for the Dow Jones index (DJIA-30) to over 3% (-3.07%) for the NASDAQ Composite. The main benchmark of the U.S. market – the S&P 500 index – fell by 2.24%.
Indexes from the ITS family were also unable to escape the sell-off, which is no surprise given their portfolios include shares of major U.S. tech firms. That said, the ITS World Index (ITSW), with a lower share of such companies, proved more resilient. It lost less than 1% (-0.98%) by the end of the day, even outperforming the Dow Jones – the least affected of the American benchmarks.
The ITS Shariah Index (ITSS), whose portfolio consists entirely of U.S. company shares, dropped 1.56% yesterday – which, by current standards, does not seem especially severe. Though of course, any loss is still unpleasant for investors.
In general, it is fair to say that yesterday’s sell-off brought an end to the short-term rebound we had seen in recent days after the notable declines in March and early April. The market is once again at a crossroads: will it move higher or continue to slide? There is no clear answer yet.
Perhaps the corporate earnings season can offer investors some encouragement. The first wave – results from banks and major U.S. airlines – shows that business remains more than confident. And it is precisely such results that provide the foundation for sustainable growth.