U.S. stocks fell sharply Wednesday as Nvidia’s steep selloff rattled the tech sector and renewed worries about escalating trade tensions with China. Investors also awaited comments from Fed Chair Jerome Powell for further insight into how the central bank may respond to the latest developments.
The S&P 500 (GSPC) shed 1.57%, while the Dow Jones Industrial Average (DJI) declined 0.93%, or more than 300 points. The Nasdaq Composite (IXIC), home to many tech heavyweights, dropped a bruising 2.50%, its worst day in weeks. The slide was triggered by news that Nvidia could face billions in losses due to new U.S. chip export restrictions.
Market Movers:
- Nvidia (NVDA) -7.96%: Nvidia shares fell nearly 8% after the company revealed it would take a $5.5 billion hit from new U.S. export controls targeting its AI chips destined for China. The government now requires special licenses for shipments of Nvidia’s H20 chips—a license it’s never approved before—casting a cloud over future international sales and the broader semiconductor sector.
- AMD (AMD) -7.0%: AMD also plunged after disclosing potential losses up to $800 million from similar export restrictions. The company’s exposure to China made it an immediate target for investor anxiety, exacerbating a broader selloff in chip stocks.
- Apple (AAPL) -2.5%: Apple shares fell below the $3 trillion valuation mark as tariff uncertainty returned as a central focus. Earlier optimism from temporary exemptions faded quickly, and concerns over prolonged trade disputes and their impact on global supply chains weighed heavily on the iPhone maker’s stock.
- Gold (GC=F) +1.1%: Gold prices surged past $3,300 an ounce, hitting a new record high. The precious metal has officially overtaken the “Magnificent Seven” tech stocks as Wall Street’s most crowded trade, as investors flock to safe havens amid escalating geopolitical and economic risks.
Trade Uncertainty Hangs Over Markets
The latest bout of market turbulence has been driven by renewed tensions between the U.S. and China, as President Trump’s administration imposed fresh export controls and hinted at sweeping reciprocal tariffs. The policy whiplash has made it difficult for companies to plan, and it’s dampening investor sentiment across sectors.
In an exclusive Yahoo Finance interview, Treasury Secretary Scott Bessett said clarity on tariffs may arrive within 90 days for most major trading partners—excluding China. But Beijing said it would only return to the negotiating table under certain conditions, a signal that trade relations remain on unsteady ground.
Meanwhile, builders and manufacturers are already feeling the pinch. The NAHB’s confidence index remains below 50, signaling more pessimism than optimism in the housing sector. Tariff-driven cost increases have added an estimated $10,900 to the average new home, squeezing affordability just as spring selling season begins.
Economic Resilience… for Now
Despite the turmoil, the U.S. economy is showing signs of resilience. March retail sales rose 1.4%, the best reading in over two years and a signal that consumers are still spending. Industrial production, however, fell 0.3%, pulled down by a drop in utilities.
The mixed data has led to revised GDP forecasts. Goldman Sachs now expects Q1 GDP to grow 0.4% on an annualized basis, up slightly from earlier predictions. Domestic final sales were also revised higher to 1.9%, helped by upward revisions to February's retail figures. Still, these green shoots may not be enough to counter the volatility sparked by the unpredictable global trade environment and nervous markets.
Looking Ahead
All eyes now turn to Fed Chair Jerome Powell, who is set to speak this afternoon. Investors are hoping for clarity on how the central bank plans to interpret the latest data and navigate through intensifying trade tensions. With chipmakers under pressure and the tech sector reeling, any signal on monetary policy could significantly shape the market’s next move.