Warnings from Jerome Powell that trade tensions risk undermining the Federal Reserve’s employment and inflation goals whipped up fresh volatility on Wall Street Thursday, with stocks resuming sharp declines while haven assets like Treasuries and gold surged.

Two days of relative calm were broken as the Fed chief signaled a wait-and-see approach to President Donald Trump’s tariff offensive, pushing back on hopes he would act quickly to soothe investors. Stocks extended losses that began earlier when two big semiconductor companies reported earnings disappointments linked to the global trade war.

Asked at the Economic Club of Chicago if he envisioned a “Fed put” in which the central bank intervened to calm markets, Powell said “no,” adding that too many questions exist about the impact of Trump’s policies. “We don’t know that yet, and until we know that we can’t make informed decisions.”

The S&P 500 sank 2.2%. Technology stocks took the brunt of the beating with the Nasdaq 100 tumbling 3.0% after the White House imposed new restrictions on Nvidia Corp.’s chip exports to China. The yield on 10-year Treasuries fell around five basis points to 4.28%.

For now, the Fed chief stressed, the labor market is “in a really good place,” with supply and demand falling in tandem. Powell said he expected those conditions to continue.

“Many had assumed that the Fed would prioritize the labor side of the mandate if forced to choose, but he suggested that price stability is necessary to maintain a healthy labor market,” said Adam Phillips, managing director of investments at EP Wealth Advisors.

“If you’re waiting for a Fed put, you should probably set your sights on a lower strike price as long as inflationary pressures remain elevated,” he added. “Don’t look to monetary policy for market support anytime soon.”

To Michael Bailey, director of research at FBB Capital Partners: “Powell just threw equities under the bus.”

“This has been a year of dashed hopes, first with disappointing tariffs, and now with the Fed leaving investors out in the cold,” he said. “Powell’s market snub came at a bad time with semis wreaking havoc on investor sentiment around the world.:

Earlier, Cleveland Fed President Beth Hammack took a similar stance as Powell, suggesting the Fed should hold interest rates steady until there’s more clarity on the impact of levies. Swaps traders cemented bets on policy-easing, wagering the Fed would lower interest rates a full percentage point by next January.

Chipmakers quiver

A drop in Nvidia shares deepened after Powell’s comments, falling more than 9%. The company warned of $5.5 billion in writedowns tied to inventory and commitments for its H20 chip in the current quarter. ASML Holding NV added to the angst, reporting lower-than-expected orders.

The U.S. government informed Nvidia on Monday that its H20 chip would require a license to export to China “for the indefinite future.” The new rules address Washington’s concerns that “the covered products may be used in, or diverted to, a supercomputer in China,” the company said in a filing.

“This move is unnerving for two reasons,” said Vishnu Varathan, Singapore-based head of economics and strategy at Mizuho Bank, referring to the Nvidia curbs. “First, it conveys the mercurial nature of Trump tariffs in so far that it has revoked earlier concessions extended to Nvidia. Second, this also suggests that the U.S.-China undercurrents are rather abusive, even as there appears to be some calm on the surface.”

Volatility rising

As volatility picked up, investors turned to haven assets including gold, which set a record high of more than $3,339 per ounce. The Swiss franc rallied while the dollar weakened as the deepening trade tensions dented conviction in the world’s reserve currency.

Also weighing on risk assets, the World Trade organization cut its forecast for the year, saying trade would decline by 0.2% in 2025, almost three percentage points lower than it would have been without new tariffs. China was reported to be looking for a point person and more respect from the Trump administration before it will come to the table to discuss tariffs.

“While we expect that trade talks will ultimately yield progress, the brinkmanship between the U.S. and China looks set to continue in the near term,” said Solita Marcelli at UBS Global Wealth Management.

U.S. retail sales for March rose 1.4% — the most in two years — as Americans went on a spending spree, snapping up everything from cars to electronics, in the days leading up to President Donald Trump’s tariff announcement.

Some of the main moves in markets:

Stocks

—The S&P 500 fell 2.2% as of 4 p.m. New York time

—The Nasdaq 100 fell 3%

—The Dow Jones Industrial Average fell 1.7%

—The MSCI World Index fell 1.5%

Currencies

—The Bloomberg Dollar Spot Index fell 0.7%

—The euro rose 0.9% to $1.1385

—The British pound was little changed at $1.3237

—The Japanese yen rose 0.7% to 142.14 per dollar

Cryptocurrencies

—Bitcoin rose 0.3% to $84,308.59

—Ether fell 0.4% to $1,588.16

Bonds

—The yield on 10-year Treasuries declined five basis points to 4.28%

—Germany’s 10-year yield declined three basis points to 2.51%

—Britain’s 10-year yield declined four basis points to 4.60%

Commodities

—West Texas Intermediate crude rose 2.3% to $62.74 a barrel

—Spot gold rose 3.3% to $3,337.90 an ounce

(With assistance from John Viljoen, Winnie Hsu, Zhu Lin, Abhishek Vishnoi, Anand Krishnamoorthy and Julien Ponthus.)

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