US Stocks Sink as Nvidia Drops, Trade War Uncertainty Grows

U.S. stocks took a sharp dive on Wednesday, dragged lower by Nvidia’s steep drop and mounting concerns over President Donald Trump’s trade war tactics, which investors fear could push the economy toward recession.

Federal Reserve Chair Jerome Powell deepened investor anxiety, saying that Trump's tariffs could have a bigger-than-expected impact slowing growth and fueling inflation. As Powell reiterated the Fed’s wait-and-watch approach to interest rates, markets across the globe shuddered.

Wall Street Summary:

• S&P 500: Dropped 120.93 points (-2.24%) to 5,275.70 
• Dow Jones Industrial Average: Fell 699.57 points (-1.73%) to 39,669.39 
• Nasdaq Composite: Sank 516.01 points (-3.07%) to 16,307.16 

🔗 S&P 500 Index Tracker – CNBC
🔗 Jerome Powell Policy Speeches – FederalReserve.gov

Powell Warns of Tariff Fallout

In a speech that rattled Wall Street, Powell acknowledged:

“We’re thinking now, really before the tariffs have their effects, about how they might affect the economy... That’s why we’re waiting to see what the policies ultimately are.”

This ambiguity isn’t helping markets, which had already been unsettled by last week’s unusual surge in Treasury yields, a move that questioned the U.S.'s status as a global safe-haven.

Bond Market: From Fear to Fragility

• 10-year Treasury yield eased back to 4.37%, from a peak of 4.48% 
• Investors remain cautious, after last week’s rise suggested doubts about U.S. debt reliability during times of economic stress

Nvidia & Tech Stocks Hammered

Leading the decline was Nvidia (NVDA), which fell 6.9% after the U.S. government restricted exports of its H20 AI chips to China. The company warned of a potential $5.5 billion hit to Q1 earnings from inventory and purchase commitments.

• AMD (Advanced Micro Devices) fell 7.3% on similar export fears and an $800 million projected impact 
• ASML, the Dutch chip equipment giant, dropped 5.2%, citing growing macro uncertainty from trade restrictions 

🔗 Nvidia Export Restrictions – SEC Filing
🔗 What Is the H20 AI Chip? – TechCrunch

Global Markets React

Asia:

• Hong Kong: -1.9% 
• Tokyo: -1% 
• Seoul: -1.2% 

Europe:

• Paris (CAC 40): -0.1% 
• London (FTSE 100): +0.3% (supported by a drop in U.K. inflation due to lower gas prices) 

🔗 Global Market Indexes – Bloomberg

Corporate Warnings: Twin Forecasts and Supply Shocks

• United Airlines issued two earnings forecasts one for a recession scenario and one without highlighting the uncertainty businesses face 
• J.B. Hunt Transport Services, a logistics giant, fell 7.7% despite posting better-than-expected profits 
• Retailers reported a surge in sales last month, as consumers rushed to buy electronics and cars ahead of expected price hikes from tariffs

Recession Fears Reach New Highs

A Bank of America survey shows that recession expectations among global fund managers are at the fourth-highest level in 20 years. Trump has defended the tariffs as a strategy to reshore manufacturing and narrow the U.S. trade deficit, but the costs are starting to show.

• Tariffs could fuel near-term inflation, forcing retailers to pass costs to consumers 
• Economists say this drove the recent retail binge, with buyers trying to lock in lower prices

Final Thoughts

As the Trump administration doubles down on its unpredictable tariff policy, markets are being pulled into a whirlwind of volatility. Tech giants like Nvidia and AMD are directly in the line of fire, while Fed Chair Powell’s indecision is adding to the fog.

For investors, the signals are flashing yellow:

• Trade uncertainty is escalating 
• Bond market confidence is shaking 
• Inflation risks are rising 
• A recession is now more than just a possibility 

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