Wall Street Tumbles as Fed Cautions on Inflation

Fed Minutes Spark Market Jitters

Stocks in the U.S. took a nosedive Wednesday after the Federal Reserve dropped a bombshell with its May meeting minutes. Investors were left hanging as the Fed hinted at a cautious stance on monetary policy, waving red flags about "difficult tradeoffs" if inflation sticks around.

Uncertainty and Tradeoffs

The Dow Jones Industrial Average plummeted by 0.58%, shedding 245 points, while the S&P 500 and Nasdaq Composite weren't far behind, dropping 0.56% and 0.51% respectively. The Fed's minutes spilled the beans that "Participants agreed that uncertainty about the economic outlook had spiked, urging a cautious approach until the dust settles on government policy shifts." They also tossed out a warning that "the Committee might face tough choices if inflation turns stubborn while growth and employment prospects weaken."

Trump Fires Back at Trade Critics

In the thick of trade talks, President Donald Trump didn't hold back, slamming a Financial Times columnist who labeled his tactics as "TACO trade"—Trump Always Chickens Out—pointing to his habit of pushing back tariff deadlines. Trump defended his moves as part of a slick negotiation strategy, claiming that trading partners like the EU are chomping at the bit to cut deals.

Retail Earnings: A Mixed Bag

On the retail front, it's been a rollercoaster. Abercrombie & Fitch Co. shares soared 14% after dropping a bombshell with stellar first-quarter results and forecasting a full-year net sales bump of 3% to 6%. But on the flip side, HP shares crashed 15% after missing the earnings mark and painting a gloomy outlook, blaming "added costs" from tariffs.

Nvidia Soars Despite China Hurdles

Nvidia didn't let export restrictions to China rain on its parade, as its shares rocketed in after-hours trading after smashing both top and bottom-line forecasts. They reported an EPS of 96 cents on a whopping $44.06 billion in revenue, blowing past expectations of 93 cents per share and $43.31 billion. Data center revenue skyrocketed 73% year-over-year, though they missed out on $2.5 billion in sales due to those pesky export restrictions. The quarter's gross margin hit 61%, but without the new China-related charges, it would've soared to 71.3%.