NEW YORK — U.S. stocks faced a significant decline on Wednesday after Nvidia cautioned that new restrictions on exports to China would severely impact its financial results, potentially costing the company billions.
Companies around the world expressed concerns that President Donald Trump’s trade war is casting uncertainty over economic forecasts for the year ahead.
The S&P 500 dropped 2.2% following a brief decline of as much as 3.3%, which could have marked one of its worst losses in years before the recent volatile trends on Wall Street.
The Dow Jones Industrial Average fell by 699 points, or 1.7%, while the Nasdaq composite experienced a significant decline of 3.1%.
The losses accelerated after Federal Reserve Chair Jerome Powell indicated that Trump’s tariffs appear to be more substantial than previously anticipated, which could decelerate the economy and increase inflation beyond initial expectations.
However, Powell maintained that the Fed requires more time before making decisions regarding interest rates that could either bolster the economy or exacerbate inflation.
“All of this is highly uncertain,” Powell stated.
“We’re thinking now, really before the tariffs have their effects, (about) how they might affect the economy.
That’s why we’re waiting really to see what the policies ultimately are, and then we can make a better assessment of what the economic effects will be.”
Nvidia’s stock decreased by 6.9% after announcing that U.S. government restrictions on the export of its H20 chips to China could mean a loss of up to $5.5 billion for its first-quarter results, including charges related to inventory and purchase commitments.
Similarly, Advanced Micro Devices saw a drop of 7.3% after forecasting that U.S. limits on exports to China could lead to up to $800 million in inventory and other charges.
In Amsterdam, ASML’s stock fell by 5.2%.
The Dutch company, which manufactures machinery for chip production, highlighted that while demand for artificial intelligence technology continues to drive growth, recent tariff announcements have heightened uncertainty in the macroeconomic environment.
CEO Christophe Fouquet noted, “However, the recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while.”
Trump’s trade war has introduced a level of unpredictability that is disrupting corporate strategies across various industries globally.
In response to this volatility, United Airlines provided two separate financial forecasts for the year, acknowledging the difficulty in predicting performance amidst the uncertain economic landscape.
The airline’s stock remained relatively stable despite reporting a stronger profit for the latest quarter than analysts had anticipated.
Investor sentiment appears to be leaning toward expectations of a possible recession triggered by the implementation of tariffs.
Bank of America conducted a survey of global fund managers and found that expectations for recession are at the fourth-highest level in the past 20 years.
The World Trade Organization issued a warning on Wednesday, projecting that tariffs could lead to a 0.2% decline in global merchandise trade volume by 2025, assuming the situation remains unchanged since Monday.
If conditions worsen, trade could decline by as much as 1.5% this year, according to the WTO’s analysis.
“The enduring uncertainty threatens to act as a brake on global growth, with severe negative consequences for the world, particularly for the most vulnerable economies,” stated Director-General Ngozi Okonjo-Iweala.
One U.S. firm, J.B. Hunt Transport Services, experienced a notable decline of 7.7%, becoming one of Wall Street’s sharper losses, even as it reported slightly stronger profits than analysts had predicted.
In total, the S&P 500 dropped 120.93 points to close at 5,275.70.
The Dow Jones Industrial Average fell by 699.57 points to 39,669.39, while the Nasdaq composite decreased by 516.01 points to 16,307.16.
As tariffs could potentially lead to increased inflation, importers in the U.S. may pass on higher costs to consumers.
Concerns regarding price hikes prompted a surge in consumer spending last month, with retail sales outpacing economists’ expectations.
Much of this uptick is attributed to U.S. consumers rushing to purchase automobiles, electronics, and other goods before prices rise further due to impending tariffs.
Recent surveys indicate that American households are growing increasingly pessimistic about the economy due to the tariffs, raising fears that this sentiment could curtail spending, potentially triggering a recession on its own.
In the bond market, Treasury yields softened, following a dip after the Fed chair’s comments.
The yield on the 10-year Treasury fell to 4.28% from 4.35% at the close on Tuesday and from 4.48% at the end of the previous week.
This shift reflects a resurgence of cautious investor behavior after an atypical rise in yields last week unsettled markets.
Treasury yields generally decline when investors harbor concerns about the economy, while last week’s increase raised questions about the perceived safety of U.S. government bonds as an investment.
In global stock markets, Asian indexes saw declines, and European markets presented mixed results.
Stocks in Hong Kong fell by 1.9%, Tokyo’s stock market dropped by 1%, Seoul declined by 1.2%, and Paris recorded a slight drop of 0.1%.
Conversely, the FTSE 100 in London managed to rise by 0.3% after a report indicating that inflation in the U.K. had declined for the second consecutive month in March, aided primarily by lower gas prices.
image source from：https://www.npr.org/2025/04/17/nx-s1-5367592/us-stocks-drop-nvidia-trump-tariffs
