[New York Stock Market] Mixed Close Amid Caution as Focus on Tariff Negotiations... Dow Down 1.33%

Trump Optimistic About Tariff Deals With EU and China
Powell Expresses Concerns Over Tariff Policy... Focus on Future Monetary Policy
Trump Again Pressures for "Powell's Dismissal"

The three major indices of the U.S. New York stock market closed mixed on the last trading day of the week, the 17th (local time). Investors cautiously observed the market as they digested the tariff negotiations between the U.S. and various countries and the earnings results of companies entering the earnings season this week. U.S. President Donald Trump once again mentioned the dismissal of Jerome Powell, Chair of the Federal Reserve (Fed), raising concerns about the infringement on the independence of the monetary authority.

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On this day in the New York stock market, the Dow Jones Industrial Average (Dow) focused on blue-chip stocks closed at 39,142.23, down 527.16 points (1.33%) from the previous trading day. The S&P 500, centered on large-cap stocks, rose 7 points (0.13%) to 5,282.7, while the Nasdaq, focused on tech stocks, fell 20.71 points (0.13%) to close at 16,286.45.

Investors are paying close attention to tariff negotiations between the U.S. and other countries. President Trump expressed hope for reaching tariff agreements with the European Union (EU) and China, which narrowed the index's losses but did not lead to an overall rebound. During a meeting with Italian Prime Minister Giorgia Meloni in the Oval Office of the White House, he told reporters, "We will 100% finalize a trade agreement with the EU before the 90-day tariff suspension ends." When asked if he would speak with Chinese President Xi Jinping, he replied, "We think we will make a very good deal with China." Earlier in the day, Trump also stated on his social media platform Truth Social that he is having very productive communications with Mexico, Japan, and others.

Market concerns are growing over the uncertainty of President Trump's tariff policies and their economic impact. Powell, who had refrained from public comments until now, openly criticized the tariff policy. At a Chicago Economic Club event the previous day, he pointed out that the level and scope of tariff increases are beyond the Fed's expectations, stating, "The impact on the economy, including inflation and growth slowdown, will also be significant." He particularly noted, "We may face a difficult scenario where the dual mandate of price stability and maximum employment conflicts," and drew a line against the possibility of rate cuts or liquidity injections citing uncertainty.

Just one day after Powell's remarks, President Trump publicly pressured him by mentioning the possibility of dismissal. He told reporters, "If I want to 'out' him, he will be fired very quickly," expressing dissatisfaction by saying, "(Powell) is not satisfactory." He also harshly criticized the interest rate policy as "political." That morning on social media, he argued, "He (Powell) should cut rates even now," and insisted, "Powell's dismissal must happen."

Krishna Guha, Global Policy and Central Bank Strategy Head at Evercore ISI, said, "Although trust in the administration has been lost, the market's response so far has been shaped by continued trust in the Fed," and forecasted, "If tariffs affect consumer prices, the Fed's independence will become a key issue of debate."

In a situation where aggressive tariff policies raise concerns about both inflation and economic slowdown, the market is closely watching the future direction of monetary policy. As expectations for the so-called 'Powell put'?the Fed's intervention to stabilize the market?wane, expectations for rate cuts are also declining. According to the Chicago Mercantile Exchange (CME) FedWatch, the probability of a 0.25 percentage point rate cut by the Fed in May dropped from 14.7% the previous day to 9.6% on this day. The possibility of a cut in June also slightly decreased but remains high at 59.9%.

Chris Zaccarelli, Chief Investment Officer (CIO) at NorthLight Asset Management, analyzed, "Powell said there is currently no opposition to the dual mandate, but he clearly touched investors' nerves," adding, "Investors are now worried that the likelihood of recession and stagflation has increased."

The U.S. labor market remains robust. According to the U.S. Department of Labor, new unemployment claims for the week of April 6?12 decreased by 9,000 from the revised previous week to 215,000. This was below the market forecast of 225,000 and marked the lowest level in two months. The market is focusing on employment indicators to gauge the impact of President Trump's tariff policies and federal government restructuring on the economy.

By individual stocks, UnitedHealth plummeted 22.38% after disappointing first-quarter earnings and a downward revision of annual earnings forecasts. Eli Lilly rose 14.36% following successful clinical trials of an obesity treatment. Nvidia fell 2.93%. The U.S. Department of Commerce has required Nvidia to obtain new licenses to export H20 chips to China, causing the stock to decline. Nvidia estimates that if exports of H20 to China are blocked by this measure, it will incur a loss of $5.5 billion in the first quarter of the fiscal year (February?April).

U.S. Treasury yields rose mainly in long-term bonds. The benchmark 10-year U.S. Treasury yield, a global bond rate benchmark, increased by 5 basis points (1 bp = 0.01 percentage points) from the previous trading day to 4.33%, while the 2-year U.S. Treasury yield, sensitive to monetary policy, rose 1 basis point to 3.8%.