US Stocks Slip After Powell’s Speech as Optimism Runs Into Caution

Wall Street stumbled on Thursday after Federal Reserve Chair Jerome Powell delivered remarks that many investors found underwhelming. Rather than providing fresh clarity on the future path of monetary policy, Powell stuck to familiar themes about inflation risks and economic uncertainty — a tone that left markets hesitant and prompted some selling.

In the absence of dramatic new signals, U.S. equity indexes edged lower. The Dow lost about 0.2 percent, the S&P 500 dipped slightly, and the Nasdaq also gave up modest ground. The slide was not steep, but it reflected a shift from the upbeat sentiment that had dominated recent sessions.

The broader mood had been buoyed by expectations of interest rate cuts later this year. Eager investors had already priced in further easing, hoping Powell’s speech would reinforce that view. But his remarks conveyed a more cautious narrative: while staying open to rate cuts, he emphasized that the Fed must remain mindful of inflation’s persistence and avoid acting prematurely. That tone grew heavy amid growing unease over economic fundamentals.

Adding to the pressure, the ongoing U.S. government shutdown has delayed key economic releases such as jobs and inflation data. With fewer new data points to guide them, market participants leaned heavily on corporate earnings to carry the day. In that environment, even modest disappointments take on outsized weight.

Some individual names dragged harder than others. Shares of Tesla dipped following news that a federal investigation was launched into its Full Self-Driving system — a negative overhang for an otherwise tech-led rally. On the positive side, airline stocks like Delta gained sharply after delivering strong results and upbeat forecasts, but those gains were not enough to reverse the overall drift.

Gold continued its run as a safe-haven and inflation hedge — it remained elevated, supported by uncertainty about the economic outlook and monetary policy trajectory. That movement underscored a growing sense of caution among investors.

Beyond the immediate reaction, broader warnings from global financial authorities added to the nervousness. The Bank of England flagged the risk of a sharp market correction if confidence in artificial intelligence or central bank independence falters. That view dovetails with growing concerns that much of the market’s recent gains are concentrated in a handful of high-flying tech names, increasing vulnerability to shifts in sentiment.

As markets digest the speech, investors are increasingly shifting their focus to upcoming earnings reports and any data leaks that might slip through the shutdown’s freeze. The question now is whether any fresh clues emerge to either bolster the optimism of earlier weeks or send the rally into deeper correction territory.

In short, Thursday’s retreat reflects a prevailing sense that much is already priced in — and without strong new catalysts, the market may be entering a more delicate phase.