Dow Plunges 390 Points as Trade War Jitters Drown Out Fed Policy Signals

Wall Street’s anxiety meter spiked as tariff chaos upstaged the Fed’s carefully choreographed rate decision. The Dow’s nosedive reveals markets care more about trade tantrums than central bank whispers.

Investors dumped stocks like hot potatoes after fresh trade war threats—because nothing says ’stable economy’ like two superpowers playing tariff ping-pong. Meanwhile, Powell & Co. might as well have been whispering into a hurricane.

Bonus jab: Another day, another ’unexpected’ market swing that hedge funds totally saw coming (wink).

Federal Reserve meeting

Markets are also focused on the Federal Reserve, which kicked off its two-day policy meeting Tuesday. The central bank is widely expected to hold rates steady, with futures markets pricing in just a 2.7% chance of a rate cut. 

However, investors are looking for guidance from Chair Jerome Powell on how the Fed is interpreting the economic impact of renewed tariff tensions.

While service sector data released Monday showed surprising strength, market participants remain concerned about the longer-term implications of Trump’s evolving stance on trade. 

Hedge fund manager Paul Tudor Jones warned that even partial tariffs could still act as significant tax increases, potentially shaving several percentage points off economic growth.