US Stocks Sink on Powell Warning, Nvidia Outlook
U.S. stocks experienced a significant decline on Wednesday afternoon, largely influenced by Fed Chair Jerome Powell's comments regarding the risks associated with tariffs, and exacerbated by a notable downturn in the semiconductor sector, which unsettled market confidence. The S&P 500 saw a decrease of 2.3%, the Dow Jones Industrial Average plummeted by over 600 points, and the Nasdaq suffered a 3.2% fall. Shares of Nvidia took a substantial hit, dropping more than 8%, following the announcement of a $5.5 billion charge due to newly implemented U.S. export regulations impacting its H20 chip shipments to China. This downward trend also affected other semiconductor companies, with AMD declining 8.1% and Micron Technology falling 2.7%, as both companies issued cost warnings amidst weak demand. Fed Chair Powell's warnings further contributed to the market's decline, as he highlighted the potential for tariffs to escalate inflation and decelerate growth, complicating the Federal Reserve's ability to achieve its policy objectives. Although retail sales experienced a 1.4% increase in March—the most robust growth since January 2023—due to consumers hurrying to purchase vehicles in anticipation of tariffs, the overarching market outlook remained pessimistic amid ongoing concerns about the enduring impact of trade barriers.
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