A sudden burst of selling hit Wall Street again on Wednesday afternoon, sinking U.S. equities as Federal Reserve Chair Jerome Powell warned that trade tensions could spur inflation and emphasized that the central bank is in no rush to reduce interest rates.

The S&P 500 Index fell as much as 3.3% before ending the session down 2.2% in New York, and the Nasdaq 100 Index slumped 3%. Losses deepened in the afternoon as Powell began to speak. The selling was broad-based, with roughly 90% of stocks in the S&P 500 in the red.

Semiconductor companies bore the brunt of declines after Nvidia Corp. and Advanced Micro Devices Inc. said President Donald Trump’s administration curbed the export of their chips to China, with sentiment further hurt by a disappointing earnings report from ASML Holding NV. The Philadelphia Stock Exchange Semiconductor Index fell 4.1%.

Powell, speaking at the Economic Club of Chicago, stressed the central bank must ensure tariffs don’t trigger a more persistent rise in inflation while warning that he expects continued volatility across financial markets.

“Powell’s pushback on the notion of a ‘Fed put,’ along with his comments suggesting inflation could be more persistent due to tariffs than initially thought highlighted the deep and pervasive uncertainty that remains an overhang to markets,” said Julian Emanuel, chief equity & quantitative strategist at Evercore ISI.

The Fed chair said that policymakers would balance their dual responsibilities of fostering maximum employment and stable prices, “keeping in mind that, without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans.”

“Clearly we had a negative bias coming into his comments, and the markets looking for some kind of ‘put.’ A Trump put, a Fed put, either will do,” said Sameer Samana at Wells Fargo Investment Institute. “Both are disappointing markets right now and then you take into account the macro and tariff issues and it’s hard to take on risk or hold risk assets.”

Stocks were already falling across the session as the Trump administration put new restrictions on semiconductor exports to China, impacting Nvidia’s H20 chip and AMD’s MI308 products — the latest escalation of Washington’s tech battle with Beijing. Meanwhile, ASML reported orders that missed analyst estimates and said it doesn’t know how to quantify the impact of recent tariff announcements.

Nvidia plummeted 6.9% after warning it will report around $5.5 billion in related charges during the fiscal first quarter, with AMD down 7.4% as it expects to take a writedown of as much as $800 million. ASML plummeted 7.1%.

“This is a shot across the bow from the White House and it shows China now has a ‘Do Not Enter’ sign for Nvidia and other tech players,” said Dan Ives, senior equity research analyst at Wedbush Securities.

Tesla Inc. was also in focus alongside other cratering Big Tech names. The electric-vehicle maker said it is no longer selling the majority of new electric cars registered in California. Shares fell 4.9%. The company’s sales slumped in the quarter even as U.S. consumers rushed to buy new cars before auto tariffs took effect this month. The Bloomberg Magnificent 7 Index, an equal-weighted gauge of the megacap tech stocks, has fallen 20% this year, after jumping 67% in 2024.

“Considering how important large-cap tech has been to the broader equity rally these last few years, it goes without saying that these headlines are worrisome,” said Dan Greenhaus, chief strategist at Solus Alternative Asset Management.