The US markets ended lower on Wednesday, extending their previous session’s losses, as traders reacted to Federal Reserve Chairman Jerome Powell's comments about the economic outlook. Powell warned the coronavirus crisis raises longer-term concerns that could result in an extended period of low productivity growth and stagnant incomes. Powell said the central bank may take additional steps to support the economy but is not considering adopting negative interest rates. Powell said at the Fed, we will continue to use our tools to their fullest until the crisis has passed and the economic recovery is well under way. The Fed Chief noted the economic outlook is both highly uncertain and subject to significant downside risks and suggested it may be necessary for Congress to provide additional stimulus.
On the economic data front, the Labor Department released a report showing US producer prices plunged by much more than expected in the month of April. The Labor Department said its producer price index for final demand tumbled by 1.3 percent in April after edging down by 0.2 percent in March. Street had expected prices to drop by 0.5 percent. The bigger than expected decrease in producer prices came as energy prices nosedived by 19.0 in April after plummeting by 6.7 percent in March. Excluding food and energy prices, core producer prices fell by a much more modest 0.3 percent in April after inching up by 0.2 percent in the previous month. Core prices were expected to be unchanged.
Dow Jones Industrial Average fell 516.81 points or 2.17 percent to 23,247.97, Nasdaq dropped 139.38 points 1.55 percent to 8,863.17 and S&P 500 was down by 50.12 points or 1.75 percent to 2,820.
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