U.S. stocks dropped sharply on Wednesday as global trade uncertainty rattled investor confidence once again. Nvidia led the losses after it warned that new restrictions on exports to China could reduce its revenue significantly. The company now expects a $5.5 billion hit due to inventory and purchase commitments.
In response, Nvidia’s shares fell 6.9% during the trading session. Meanwhile, AMD also warned of potential losses. The chipmaker said new U.S. export limits could cost up to $800 million. Consequently, AMD stock sank 7.3%. The impact wasn’t limited to the U.S.
Dutch chip machinery maker ASML reported strong AI-related demand but still dropped 5.2%. CEO Christophe Fouquet said global trade uncertainty continues to weigh on forecasts and growth expectations.
Markets reacted swiftly. The S&P 500 fell 2.2%. The Dow Jones dropped 699 points. Nasdaq posted the steepest drop at 3.1%. Losses accelerated after Fed Chair Jerome Powell spoke.
Powell warned that tariffs could slow growth and raise inflation more than expected. However, he said the Fed needs more time before making policy decisions. He stressed that the situation remains unpredictable due to unclear trade outcomes.
United Airlines offered two different forecasts for the year. One projected a recession; the other did not. The company said it’s “impossible to predict” with confidence right now. Even with strong quarterly profits, United’s stock remained flat.
Global trade uncertainty has pushed companies into cautious territory. J.B. Hunt Transport Services fell 7.7% despite exceeding earnings expectations. Investors feared future slowdowns in shipping and logistics.
Shoppers also rushed to buy cars and electronics before possible tariff-driven price hikes. Retail sales jumped, surprising many economists. However, rising inflation and shrinking consumer confidence remain concerning.
Bond yields dropped after Powell’s comments. The 10-year Treasury yield fell to 4.28% from 4.35%. This signals investor fears about the economy.
International markets also dipped. Hong Kong dropped 1.9%, Tokyo 1%, and Seoul 1.2%. However, London’s FTSE 100 rose 0.3%, thanks to lower U.K. inflation.
Overall, Wall Street remains fragile as global trade uncertainty continues to shake financial markets across sectors.
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