Stocks Drop As Nvidia Slides… And Powell Warns Of Tariff Impact 4/16/25

0:00Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast money. Here's what's on tap tonight. A sell-off on the street as Fed Chair Powell warns of continued volatility, saying tariffs are even higher than the central bank expected. All the headlines is market-moving comments straight ahead. Plus, gold's dark side, the precious metal hitting yet another new high today. But one of our traders says the magnitude of the move is actually a potential cause for concern. And later, mining the moment for critical minerals, a credit check on American Express. And will D.R.

0:29Horton be another bummer for the builders? I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Steve Grasso, and Guy Adami. We start off with the markets taking a massive leg lower after some big headlines out of the Fed. Chair Jerome Powell speaking policy at the Economic Club of Chicago, saying government policy could put changes to the central bank's monetary policy on hold. 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.

1:07Both survey and market-based measures of near-term inflation expectations have moved up significantly, with survey participants pointing to tariffs. Major averages finishing sharply lower, though off their worst levels of the day. The Dow down 700 points, the S &P 500 falling more than 2 percent, and the Nasdaq dropping more than 3 percent. The 10-year yield also taking a hit on the back of today's comments, falling back below 4.3 percent. So what should we make of the Fed's comments, Guy? Well, they're not going to bail out the stock market. I think that's pretty clear. And they're not going to bow to the will of the administration in terms of lowering yields anytime soon.

1:42Because, quite frankly, nothing out there justifies it, I don't think. I mean, if you think the stock market is scaring the Fed, I think you're wrong. I don't think they're focused on that. I think the bond market last week absolutely probably scared them. But that's not their mandate either. So to me, he said everything that he's been saying for quite some time, and the market's just starting to listen to him. Yeah, Karen, you made that point, too. Like, what did we hear that was new today? I know. If you were waiting for it, if you were out there expecting a cut from him, I think that didn't make sense because we know he has this dual mandate.

2:12One side of it is in pretty good shape, right? The labor market is really in good shape. The other has a huge question mark overhanging it. And he really doesn't want to make the same mistake again and letting inflation sort of, you know, potentially run amok. So I didn't think there was anything that was surprising. And yet I was surprised that the market was surprised. Yeah. Although he did. It did seem like there was a little bit more acknowledgement of sort of the bad outcomes of all this. The dual mandate goals being intention, I thought, was an interesting phrase. And also the need for price stability in order to have a strong labor market.

2:46But that says maybe I'll do something at that point, not right now, I think. Right. Yeah, I heard that, Mel. I heard, first of all, I heard a Fed that I thought was digging in a little bit more today into their stance and that basically current policy is forcing them away from their goals, or at least, and that they won't be forced away from their goals. And in fact, there was a preview. Fed's hammock was speaking earlier in the day, and this was at 12 o 'clock. And I think it was really setting the table for this, which is that we are not going to, I think, something about respond to the twists and turns of the market, I think was a quote.

3:22And I think the dynamic here, it's kind of funny or ironic or not at all. But I would make an argument that our Treasury secretary is somebody that probably for a long time wanted the Fed, lived in a world where I think was very critical of a Federal Reserve. I'm not, you know, maybe I'm putting policy words in his mouth, but I think Scott Besson historically was someone that probably felt the Fed was always too quick to jump to the market's rescue. There's a lot of people that have been kind of fiscal hawks on the investor side and the hedge fund community. And I think this is exactly what you probably want to hear the Fed saying, except for if we are at a time where it's an unprecedented dynamic in terms of what we're seeing and what the market has to respond to and uncertainty.

4:02You know, you get this place where if the Fed's not going to move, tell us the market, no go. It also tells you there's no stagflation, right? So if he's not worried about the employment side, there can't be stagflation. If he's not worried about saving the market, then who knows where inflation is going right now. If he's talking about tariffs, how can you talk about tariffs without knowing what the after effect is? He's only there to react to the after effect, not the pre-tariff. Would you agree with that? I mean, we thought it was clear, yes, the Fed is going to wait to see the impact on the economy.

4:38I thought that there was an acknowledgment of stagflation when he said that they could be in the challenging position of finding that the goals of the dual mandate would be intention. So, in other words, employment and labor and that there is going to be inflation because of the tariffs. And so, therefore, you put those two together and those seem to be the ingredients. Then not employment, then jobs, then jobs will drop. But if you had to pick between the two out of those mandates, I would say he's got to save jobs versus attack inflation. That's my opinion. Well, it seems like he's saying that he's got to get a hold of price stability in order to address weakness in the labor market.

5:13I don't know. That was my interpretation. Well, it's 12 months ago, almost I think it was 12 months ago that he said in response to a question. This is General Powell. I see neither the stag nor the fallation. And that's coming back to bite him. And you know what? Because that's where we're in the midst of right now. And if you start to see an uptick in the unemployment rate, which I think in this environment, it's almost inevitable. Then you have stagflation right in front of you. And regardless of what they do, it's going to be the wrong thing. So they're better off just sitting on their hands.

5:37We may all have heard for a long time that Fed Chair Powell is not going to do anything for a long time. But the markets were pricing in a move pretty soon. If not May, then probably June was fairly high. So there has to be some recalibration in terms of expectations, even if you guys didn't think anything was going to happen. A couple things. To be fair to Jerome Powell, the tariff mandate wasn't on the table at the time that he said that. Fair. There was no stag. There was no inflation. The inflation was there, and we were on the precipice of a bit of a slowdown. These tariffs just sort of put the match on the top of the tinderbox, but that's just me.

6:14Okay, you want to give them a pass, that's fine, but you shouldn't make glib comments like that sitting in that seat, understanding that you don't know what's down the road. As Jamie Dimon can, you know, right. Yeah, I shouldn't have said get over it. Right. Right. But maybe there's something else to do beside some way to address financial conditions. Balance sheet. Right. You still have$35 billion rolling off per month of MBS. That's the way to actually go right at what they're trying to go right at, which is mortgage rates. They're down to$5 billion of treasuries. That's okay. That's a little number or insignificant to the greater scheme of things.

6:51But$35 billion they have not adjusted yet. If they adjust that, it could have a dramatic effect on bringing down rates. And look, Powell, at$130, you can look at your intraday chart of the S &P and you can see what it did. It went down almost straight down 2 % for recovering a little bit at the end of the day. But I'll also say this wasn't really about the Fed today. We were looking for any reason to sell this market. We rallied back to the top end of a downtrend that basically started, depending on when you look at it, most of it's really February 20, February 21. We've had bear crosses, death crosses, whatever you want to call them.

7:23They're not a rule, but they were very foreboding, foretelling in the case of the semis only two weeks ago. So you've got the S &P where the 50-day is crossing over the 200 days, basically telling you the longer-term trend is down. Same thing in the NASDAQ. And the market had rallied up to a level where, look, I just think that the market was looking for this opportunity today. We had a start last night with the comments on NVIDIA. It played into today. And all you needed was a Fed to say, I'm not, you know, I'm not your answer here. So I yes, the Fed comments, as we've all said, were important, but not necessarily different than what one might have expected to hear.

8:01This was a market that is not ready just very early into early earning season. And all we hear from everybody, whether it's corporate CEOs, even the Bank of Canada today said we are no longer giving forecasts. We're giving scenarios. We actually think that based upon trade policy, what we formerly always done is no longer what we can do. There's a central bank saying that. You know, yesterday we heard about scenario analysis in some of the after hours comments. Five dollar difference in the top of the range versus the bottom of the staircase range. I mean, that's almost useless. And that's those are the those are the terms.

8:35I think that was the term that the Bank of Canada said. Right. Forecasts right now are useless. Yep. For more on all this, let's bring in a bleakly financial group, Chief Investment Officer Peter Bookmark. He's also a CNBC contributor. Peter, always great to get your take on things. You say the economy and the stock market are tied at the hip. We've had quite a roller coaster ride. Is there anything, I mean, and Chair Powell doesn't sound like he's going to do anything to save the market. So what's your take on what was said today and the market reaction? Well, I think you said it right earlier.

9:07He specifically said that you need price stability first in order to lay the foundation for a healthy labor market. And that's what he said as he was raising interest rates a few years ago. That was the reason. So that tells me that while maybe at some point they respond to an unemployment rate that's going to 5 % or 6%, if, at least right now, inflation is still their main focus. He retires in May 2026. He's known as Mr. Transitory, and he's not going to give that up. But if the markets froze up and there was a big problem, I think they would use the standing repo facility or temporary QE like the Bank of England did.

9:48That would be their first sort of use of a tool. But they're not cutting interest rates to save tariff policy that gets us into trouble. Do you agree with that, Tack? I mean, I'm just curious because there are some people who say that the Fed should be more proactive, knowing that the tariffs were much bigger than we had expected. Seeing the reaction the markets already seen, not just the reaction of the financial markets, but also the sentiment surveys, which Chair Powell acknowledged, the steep declines in sentiment when it comes to businesses as well as households. I understand that belief.

10:25I think the economy is on very weak knees right now. But on the other hand, if they did start to cut and then we completely rolled back all the tariffs, then what? Does he then take back what he just cut? So I think he's really left in a very difficult situation. And he has no choice but to wait to see what the endgame is with tariffs, what the actual rates are, particularly with China and what these deals are like. Because how do you sort of get ahead of that until you know what the playing field looks like? Peter, last week, the bond market rightly so scared a lot of people. Did we dodge a bullet or was that just a tremor?

11:03I think it's a tremor. I think the downward trend in the dollar, treasuries, foreigners that owned about$30 trillion of stocks, treasuries and corporates, they are deciding to find other homes for that money. And if we're going to truly cut the trade deficit, we'll obviously have less capital flows that come back into the U.S. So I think this is just more tremors, as you say, and that I can't rule out another test of 5 percent at some point in the 10 year yield. Peter, it's Karen. Thanks for being on. Is there a point that the unemployment numbers, what point would you think that would be that would force him to move even without clarity on the tariff and inflation situation?

11:50I think if we started to see, call it two to three tenths increases in the unemployment rate for a couple of months in a row, he's going to respond. I mean, he doesn't want to see a dramatic slowdown and he's sitting there doing nothing. But he'll do something. But there are a couple of risks here. Let's just say he cuts three or four times as the market's priced in right now. Well, there's risk that the 10-year yield goes higher, just as it did after he cut 100 basis points. Well, we've already seen some vulnerability in the dollar. Well, what if he cuts and follows through and the dollar index, instead of being at 100, goes to 90 or 85?

12:26Well, then and then oil goes to$100 and you see other types of inflation picking up because of that weakness in the dollar. So there's no free lunch here that the Fed can present to us just by cutting short term interest rates. There are a lot of other possible negative consequences that can come of that. Peter, thanks for your time. Good to see you. Thanks, Melissa. Peter Brookfarr, Weekly Financial. So, Trumpal is really in a box. I mean, there are really no alternatives here except to stand pat at this point, it sounds like. I think that's exactly it. I don't see any—unless the external pressure is such that he forces his hand, which I don't think is going to happen, there's no reason to move here.

13:06I mean, if it's a stock market thing, you're barking up the wrong tree, I think, Mel. But aren't they always late? They have to be late by their nature. It's not an insult. They have to be late because they have to react to something. They can't react in thinking where the puck is going. They have to just skate to where the puck is now. By the way, tariffs can be deflationary, right? Demand destruction. If you're in a recession and nobody's buying anything, they can't afford it. So both sides of that dual mandate work in tandem. So you really can't attack one or the other. And what we left out was the basis trade is an$80 billion trade with 100 times leverage.

13:43So when we see a rise in yields, that's an$80 trillion effect in the Treasury market when it's maximized. That's the reason why yields are rising. Well, you know, today, if you're looking for a glass half full, it's actually that the Treasury market kind of behaved as it should have. In other words, you saw a flight to quality. It was only 32 basis points of a rally, not 32 basis points, 0.32 points of a rally. I don't know what that translated into. It probably rallied five or six basis points. But this is the type of a day when you saw equities in free fall. The dollar sold off almost 1 percent.

14:19By the way, the euro hit 38-month highs against the dollar. Swiss franc, the all-time gold standard. We're going to talk about gold in a second. But, you know, that which represents gold went to all-time highs. Good prelude to that conversation. But I'll just get back to the retail sales number we had this morning, which looked great on the surface, is once again defines the Fed in a box. It tells you that some of the numbers and some of the pull forward here means very little to what we really have. And that, in fact, because of tariff policy, people did something they're not going to do next month, which was buy.

14:47All right. Let's get to dollar gold and yields. Another warning sign potentially developing in the market. The traditional relationship between the dollar and rates appears to be breaking down. The yield on 10 year treasury is markedly higher in April, even as the greenback comes under pressure. At the same time, gold prices continue to soar, with the precious metal popping more than 3 % today to set its 22nd record of this year. So what do these things, taken together, tell you about where we are? Guy. I think this is collectively something we've been talking about for over a year and a half now, easily.

15:18And the environment that the debt problem out there is such that people are starting to figure out you need to be in gold. Central banks over the last four years have bought gold in record amount. And we also said that there's going to be a point in time where the dollar starts to fall and yields start to go higher and people are going to be looking around, scratching their head. Janet Yellen over the weekend was discussing that. Pull up a dollar-yen chart below 142 today, the lowest level we saw since August of last year. I think we all remember what happened on August 5th. So these huge dislocations, as Tim just said, in currencies, global bond markets, people are figuring out that gold is the place to be.

15:53And it makes a lot of sense to me. This is exactly the environment that gold works. And it's telling a really dangerous story, I think. Yeah. Kudos to you and Tim for totally being on the gold gravy train, I guess. But Bitcoin has also performed. And, you know, we had been concerned that Bitcoin had really been a momentum, you know, risk on, risk off. But it's proving to be something else. Yeah. You're mentioning all the sort of highs against the U.S. dollar. Yeah. Swissy, yen. euro. This really puts pressure on those banks, though, to start cutting. Well, it's interesting. So the ECB basically is going to resume cutting.

16:34They kind of told you that today. And historically, this is what's fascinating about right now. Dollar, dollar euro, Dixie basket, dollar yen was trading on central bank differentials. You had a bank in Japan that was playing around for years. So, of course, the yen went weaker and weaker. The central bank differentials between the ECB and the Fed were such that the dollar was strengthening. And it was pretty clear. Now, ECB is still telling you they're going to ease, and yet the euro rally is 1 % today. So it is getting back to, I think, kind of, I wouldn't go as far as to say regime change, but this is clearly, we're seeing a lot of repatriation of assets, not just people leaving the United States, but also I think you're seeing a lot of U.S.

17:14investors moving to other places around the world. So I think that's fascinating, and I don't think that abates necessarily. It's surprising that we hit fresh levels when, And in fact, markets had rallied back a lot. You'd think that would be at the peak of a market low. So maybe if you go back to 2000, 2018, we had trade war 1.0. Gold rallied aggressively during that. This is much worse or much more impactful than that. So you would expect gold to rally much more than it did in 2018. And it is. If you look at those correlations, if you have the dollar and gold, that makes sense. The only outlier yields.

17:50If you put in the basis trade over yields, that makes sense why that's the only outlier. There's got to be an unwind that we're not looking at because the dollar and gold to everything that guy just said makes sense why the dollar is underperforming and gold is outperforming. Yields don't make sense. That's the basis trade. All right. Meantime, semis among the biggest losers in today's sell off. NVIDIA dropping nearly 7 percent. It had been down more than 10 percent at its lows. That after the company warned last night of a more than$5 billion charge tied to chip exports to China. Taiwan Semi and ASML Holdings also under pressure today thrown AMD, which also said it would have a write-down because of its exposure in terms of a chip specifically made for the China export market.

18:32We also got a headline from NVIDIA indicating that it had received$18 billion in orders at the beginning of Q1, So that$5.5 billion write-down reflects that$18 billion in orders at the beginning of Q1. Yeah, we were talking about just before the show. That would have been a nice margin, a little bit higher margin on those chips than I would have thought because their highest margin chips are in the low 70 range. So it's not surprising that it sold off more than that because you don't get the feeling like, OK, now we know exactly where we are. Right. We have no idea. So it's understandable why it's trading so poorly.

19:11The technicians are, and I'm not one of them, but I do care about technicals as part of an overall mosaic or whatever you want to say. It sets up a picture. If you look at a 10-year chart of AMD, this has been one of the great growth stories over that last decade. We're at some really key, if you look at long-term uptrend on a monthly chart going back 10 years, we're right there at support. If you look at a lot of semis, the damage that's been done, the question is, has technical damage been done in a way that these things need to go lower here? This is a very important level. And you mentioned AMD.

19:45That's a fascinating chart. When you look at the chart in NVIDIA, it looks like it got down to$92. I think the next level, you have to go back to that$75 level that was back in April of 2024. I think you could definitely trade down to that level. This licensing that they have to apply or pay for, that's never going to take place. That's a negotiating tactic. That'll never happen. It has never happened. Or you can count on one hand or only using one finger how many times it has happened. It's not happening. Which finger? Coming up more on today's sell-off as volatility continues to grip global markets, where investors are seeking shelter from the storm and their top concerns during all the stock swings.

20:25But first, minerals on the mine, the latest tariff target from the Trump administration. The names that could feel the impact next do not go anywhere. Fast Money is back in two. Welcome back to Fast Money. President Trump opening an investigation to potential new tariffs on imports of all U.S. critical minerals, which go into batteries and consumer electronics, U.S. rare earth companies, MP Materials and Albemarle. Among the names moving on today's news, CNBC's Pippa Stevens is looking at the money and the movers in the space. Hey, Pippa. Hey, Melissa. While increasing domestic production of critical minerals has become a goal of this administration, with Interior Secretary Doug Burgum calling to, quote, mine, baby, mine, but it's not that easy.

21:04because while the U.S. does have mineral reserves, they're expensive to get out of the ground. Still, there is some domestic activity. MP Materials mines rare earths out in California. The stock is jumping because China, the dominant player, has halted exports. Albemarle has domestic lithium operations while London operates a nickel mine out in Michigan. And then Rio Tinto and Freeport also have copper mines out west. But it's not nearly enough to meet domestic demand. The U.S. is 100 percent dependent on imports for 12 critical minerals, including graphite, and more than 50 percent dependent for another 31, including rare earths, cobalt, uranium and nickel.

21:40That's according to the WRI. Plus, as Brian Beal from Benchmark told me, tariffs alone will not be enough to bolster domestic production. There's got to be permitting reform as well as stable price signals that mobilize Wall Street. Melissa? I mean, there has to be just entire sort of chains built, supply chains in effect, because, for instance, MP, they're really heavy on heavy focus on light rare earths as opposed to the heavy rare earths, which are very expensive and difficult to separate. Yeah. And not to mention that a lot of that is ultimately going to China to be refined, because China was very strategic in the sense that when they do have a lot of rare earths, but they don't have things like lithium.

22:20So instead, they focused on getting their refining and processing and smelting for copper up and running. And so a lot of the ore that's mined around the world goes to China. So in the case of MP materials that's mined here, goes to China, then comes back here. But it really is about creating all these new supply chains. And in the U.S., our challenge, of course, is permitting. It takes 29 years on average for a new mine to come online. That is the slowest in the world behind only Zambia. And so the administration is talking about mining, but the reality is much different on the ground. Yep. Pippa, thank you.

22:50Pippa Stevens. Got to go to you, Gras. You've been on MP for a long time. Since the start of the year. And China does 70 percent of the extraction for the globe. MP provides 12 to 15 percent of global supply. But as Pippa was saying, it all get the refining process. China does 85 percent of it. The key to this stock play is that MP is the most direct, the only direct rare earth mining company that you can buy here and feel comfortable with. The stock is basically doubled. I'm half out of my position. I'm probably going to roll the dice on the balance of the 50. I think it has room to go higher.

23:25Yeah, but of course, it's more than just rare earth, as Pip had mentioned. There's lithium, there's nickel, there's copper and all of this. I think copper is fascinating here, right? Because it's called Dr. Copper because it tends to be a gauge of the economic dynamics. And if we're so worried about it, but copper prices after tanking a couple of weeks ago have really held and kind of supported. I think PGM, so precious metals, platinum, played them, and don't quit on silver. I think silver's rallied 15 % and outperformed gold in the last two weeks. Look at an Albemarle chart. We're trading levels we saw in 2020.