The stock market took another hit on Wednesday afternoon after Federal Reserve Chairman Jerome Powell warned that President Donald Trump's tariffs could cause a slight increase in inflation in the near future.

The warning caused the Dow Jones Industrial Average to drop nearly 700 points (1.73%) at the close of the day, per CNBC. The S&P 500 fell 2.24%, and the Nasdaq Composite closed with a 3% loss.

The drop was not the first time the market reacted to the tariffs. The stock market also plunged earlier this month after the president's announcement on April 2. Some of the markets recorded the lowest numbers in years.

The volatility in the stock market occurred after Powell warned in Chicago on Wednesday that the tariffs were even higher than the Federal Reserve expected in its worst-case scenario, the New York Times reported.

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”

Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.