US STOCKS-Wall Street extends drop as Powell says growth appears to be slowing

By Caroline Valetkevitch

NEW YORK, April 16 (Reuters) - The three major U.S. stock indexes extended declines in afternoon trading on Wednesday, with the S&P 500 last down more than 2% after Federal Reserve Chair Jerome Powell said that while the U.S. economy is still in a solid position, growth appears to be slowing.

Powell, in remarks for the Economic Club of Chicago, also said that so far larger-than-expected tariffs likely mean higher inflation and slower growth. He said the Fed is waiting for greater clarity before considering policy changes.

"Powell’s saying what the market has been fearing all along. And it’s coming from the Fed chief, confirming all these things," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

The S&P 500 was down more than 1% before the remarks, with chipmakers leading declines as Nvidia NVDA.O warned of steep charges from new U.S. curbs on its chip exports to China.

The Dow Jones Industrial Average .DJI fell 631.82 points, or 1.57%, to 39,737.14, the S&P 500 .SPX lost 127.09 points, or 2.35%, to 5,269.54 and the Nasdaq Composite .IXIC lost 576.59 points, or 3.43%, to 16,246.63.

Global chip stocks took a battering on fresh evidence that U.S. President Donald Trump's shifting trade policy was muddying the outlook for the sector. An index of semiconductor stocks .SOX was last down 5.5%.

Declining issues outnumbered advancers by a 1.68-to-1 ratio on the NYSE. There were 72 new highs and 77 new lows on the NYSE.

On the Nasdaq, 1,266 stocks rose and 3,021 fell as declining issues outnumbered advancers by a 2.39-to-1 ratio.