Talk of the Town
(NEW YORK) — Tech giant Amazon said on Wednesday it planned to cut about 16,000 employees as it seeks to “strengthen” its business by reducing “layers” and “bureaucracy” within its workforce.
“The reductions we are making today will impact approximately 16,000 roles across Amazon, and we’re again working hard to support everyone whose role is impacted,” Beth Galetti, a senior vice president, said in an email to staff, according to the company.
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(NEW YORK) — Stocks closed mixed in volatile trading on Thursday after President Donald Trump delivered a televised address vowing to hit Iran “extremely hard” over the coming weeks.
The Dow Jones Industrial Average closed down 60 points, or 0.1%, after opening down by 600 points, while the S&P 500 ticked up 0.1. The tech-heavy Nasdaq increased 0.1%.
Each of the major indexes tumbled more than 1% in early trading, but they quickly recovered most or all of those losses.
The rollercoaster trading followed losses across Asian and European markets. Tokyo’s Nikkei 225 index slipped 2.3% and the pan-European STOXX 600 fell 0.6%.
Oil prices, meanwhile, surged as traders feared a persistent supply shortage amid the ongoing U.S.-Israeli war with Iran. U.S. oil prices climbed more than 10% on Thursday, registering about $111 a barrel.
Gasoline prices in the U.S. ticked up to $4.08 on average per gallon, marking a leap of $1.09 over the past month, AAA data showed.
Speaking at the White House on Wednesday, Trump voiced mixed messages about his plans for the Middle East conflict. He said Iran is no longer a threat to the U.S. and the war in Iran is “nearing completion.” However, he added, the U.S. plans to continue striking Iran over the next two or three weeks.
“We’re going to bring them back to the stone ages where they belong,” Trump said.
The trading volatility on Thursday interrupted an upswing for markets earlier in the week. On Tuesday, the Dow Jones Industrial Average soared more than 1,100 points, adding another 220 points on Wednesday as traders anticipated Trump may signal an off-ramp from the war in his evening remarks.
Since the war with Iran began on Feb. 28, Trump has issued conflicting signals about the expected duration of the war. On several occasions, stocks have climbed or fallen as markets weighed the implications of Trump’s comments.
The war prompted Iran’s effective closure of the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of the global oil supply.
The vast majority of fuel delivered through the strait is bound for Asia, placing the heaviest pressure on energy supply in that continent. Since oil and gas are sold on a global market, however, the shortage has sent prices rising for just about everyone.
On Wednesday night, Trump urged other countries to take responsibility for reopening the strait.
“The countries of the world that do receive oil through the Hormuz Straight must take care of that passage,” Trump said. “We will be helpful, but they should take the lead in protecting the oil that they so desperately depend on.”
A potential U.S. exit from the war without ensuring that the strait is open could cast uncertainty over the path to a resumption of normal tanker traffic and a remedy for the current global oil shortage.
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(NEW YORK) — The Federal Reserve on Wednesday is set to announce its latest decision on the level of interest rates, marking its first rate move since news surfaced of a federal criminal investigation into Fed Chair Jerome Powell.
The investigation ratcheted up an extraordinary clash between the nation’s top central banker and the White House, which has urged the Fed to significantly reduce interest rates.
The central bank is widely expected to defy President Donald Trump’s wishes, opting instead to hold interest rates steady. The anticipated move would end a string of three consecutive quarter-point rate cuts, aligning with a cautious approach outlined by Powell last month, before reports of the investigation into his conduct.
“We’re well positioned to wait and see how the economy evolves,” Powell said at a press conference in Washington, D.C., on Dec. 10.
Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.
The federal probe appears to center on Powell’s testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project. Powell, who was appointed by Trump in 2017, issued a rare video message earlier this month rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.
The investigation follows months of strident criticism leveled at the Fed by Trump. The president denied any involvement in the criminal investigation during a brief interview with NBC News hours after the Fed posted Powell’s video.
Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy known as “stagflation.” Those conditions have put the Fed in a difficult position.
The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.
The strain on both sides of the Fed’s mandate presents a “challenging situation” for the central bank, Powell noted last month.
“There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said.
If the Fed raises interest rates as a means of protecting against elevated inflation, it risks a deeper slowdown of the labor market. On the other hand, by lowering rates to stimulate hiring, the Fed threatens to boost spending and worsen inflation.
The criminal investigation into Powell raised concern among some analysts and former top Fed officials, who said it poses a threat to central bank independence.
In the event a central bank loses independence, policymakers tend to favor lower interest rates as a means of boosting short-term economic activity, analysts previously told ABC News. Such a posture could pose a major risk of yearslong inflation fueled by a rise in consumer demand, untethered by interest rates.
Federal law allows the president to remove the Fed chair for “cause” — though no precedent exists for such an ouster. Powell’s term as chair is set to expire in May, but he can remain on the Fed’s policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.
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(NEW YORK) — General Motors said on Monday it expects to receive $500 million in refunds from tariffs that were ruled illegal by the Supreme Court.
The automaker is now boosting its full-year profit forecast by $500 million, GM CEO Mary Barra said in a letter to shareholders as the company announced its Q1 results. Barra also cited strong sales of its full-size pickup trucks, despite rising gas prices.
The federal government opened last week its refund portal to allow companies to apply to get tariff money back. The Supreme Court ruled in February that the International Emergency Economic Powers Act did not give President Donald Trump the power to unilaterally impose tariffs.
GM is one of more than 330,000 importers who paid the IEEPA tariffs that were invalidated, totaling $166 billion.
The IEEPA tariffs alone cost the typical American household $700 last year, according to the nonpartisan Tax Foundation.
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