Slump By Nvidia May Weigh On Wall Street

The major U.S. index futures are currently pointing to a lower open on Wednesday, with stocks likely to see further downside after ending Tuesday's choppy trading session modestly lower.

A steep drop by Nvidia (NVDA) is likely to weigh on the markets, as the AI darling is plunging by 6.8 percent in pre-market trading.

The slump by Nvidia comes after the company said its first quarter results are expected to include up to approximately $5.5 billion of charges associated with its H20 integrated circuits.

Nvidia noted in an SEC filing that the U.S. government now requires a license for the export of the graphics processing units to China and other countries.

Dutch chipmaker ASML (ASML) is also seeing significant pre-market weakness after warning of increased uncertainty around its outlook for 2025 and 2026 due to U.S. tariffs.

However, the negative sentiment may be partly offset by a Commerce Department report showing a sharp increase by U.S. retail sales in the month of March.

After ending Monday's volatile session notably higher, stocks continued to show a lack of direction over the course of the trading day on Tuesday. The major averages bounced back and forth across the unchanged line before eventually closing modestly lower.

The Dow fell 155.83 points or 0.4 percent to 40,368.96, the S&P 500 dipped 9.34 points or 0.2 percent to 5,396.63 and the Nasdaq edged down 8.32 points or 0.1 percent to 16,823.17.

The choppy trading on Wall Street came as traders took a step back to digest the latest earnings news as well as developments on the volatile tariff front.

President Donald Trump has indicated a potential temporary tariff exemption for the auto industry, especially for counties like Mexico and Canada.

At the same time, there were reports that the U.S. was kicking off investigations into imports of pharmaceuticals and semiconductors as part of a bid to impose tariffs.

On the U.S. economic front, the Labor Department released a report showing import prices edged slightly lower in the month of March.

The Labor Department said import prices slipped by 0.1 percent in March after rising by a downwardly revised 0.2 percent in February.

Economists had expected import prices to come in unchanged compared to the 0.4 percent increase originally reported for the previous month.

Meanwhile, the report said export prices were flat in March after climbing by an upwardly revised 0.5 percent in February.

Economists had expected export prices to come in unchanged compared to the 0.1 percent uptick originally reported for the previous month.

A separate report released by the Federal Reserve Bank of New York showed New York manufacturing activity has declined modestly in the month of April.

While most of the major sectors ended the day showing only modest moves, banking stocks saw notable strength, resulting in a 1.7 percent gain by the KBW Bank Index.

Bank of America (BAC) and Citigroup (C) ended the day firmly positive after reporting better than expected first quarter results.

Networking stocks also saw some strength on the day, while transportation stocks moved to the downside, dragging the Dow Jones Transportation Average down by 1.1 percent.

Commodity, Currency Markets

Crude oil futures are jumping $0.66 to $61.99 a barrel after slipping $0.20 to $61.33 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,324.30, up $83.90 compared to the previous session's close of $3,240.40. On Tuesday, gold climbed $14.10.

On the currency front, the U.S. dollar is trading at 142.60 yen compared to the 143.21 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1350 compared to yesterday's $1.1282.

Asia

Asian stocks ended mostly lower on Wednesday despite Chinese GDP growth and other key economic data coming in above estimates.

Tariff worries persisted as China moved to halt Boeing purchases amid trade tensions and U.S. President Donald Trump issued a pointed message, saying China should approach the U.S. for a trade deal to ease tariffs because it relies heavily on American consumers.

"The ball is in China's court," the president said in a statement read at a White House briefing.

Meanwhile, as the tariff war heats up, China today appointed Li Chenggang as vice minister of commerce and a top representative for international trade negotiations, replacing Wang Shouwen.

China's Shanghai Composite Index edged up by 0.3 percent to 3,276 after official data showed China's economy grew more than expected in the first quarter despite trade tariff disputes.

GDP grew 5.4 percent year-on-year, the National Bureau of Statistics reported. This was better than economists' forecast of 5.1 percent and was unchanged from the previous quarter.

In March, retail sales moved up 5.9 percent from the previous year, while economists had forecast sales to climb 4.2 percent. Industrial production advanced 7.7 percent from a year ago compared to forecasts of 5.7 percent.

Fixed asset investment increased 4.2 percent in the January to March period, while economists had forecast an expansion of 4.1 percent.

Hong Kong's Hang Seng Index tumbled .9 percent to 21,056.98 amid rising U.S.-China tensions. The Hong Kong Post said today it had suspended goods mail services by sea to the United States and will suspend its air mail postal service for items containing goods from April 27 due to "bullying" U.S. tariffs.

Japanese markets fell sharply, with tech stocks coming under pressure after chipmaker Nvidia said the U.S. put new restrictions on some chip exports to China.

The Nikkei 225 Index slumped 1.0 percent to 33,920.40, while the broader Topix Index settled 0.6 percent lower at 2,498.03. Advantest plunged 6.6 percent, Tokyo Electron gave up 1.5 percent and SoftBank lost 2.5 percent.

Seoul stocks fell sharply, with the Kospi declining 1.2 percent to 2,447.43 following Washington's decision to restrict Nvidia's artificial intelligence chip exports to China. Samsung Electronics tumbled 3.4 percent and SK Hynix shed 3.7 percent.

Australian markets ended a choppy session marginally lower, with mining and tech stocks facing setbacks from global trade tensions.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index rose 0.5 percent to 12,067.92.

Europe

European stocks have moved lower on Wednesday as ASML warned of increasing uncertainty around its outlook for 2025 and 2026 and Nvidia said it would incur $5.5 billion in charges due to new U.S. export controls.

Investors also looked ahead to the European Central Bank's policy meeting on Thursday, with markets widely expecting a 25-basis-point rate cut.

In economic news, U.K. consumer price inflation weakened in March largely due to a decrease by petrol prices, the Office for National Statistics said today.

Consumer prices registered annual growth of 2.6 percent, slower than the 2.8 percent increase in February. Prices were forecast to climb 2.7 percent.

Core inflation that excludes prices of energy, food, alcohol and tobacco, weakened to 3.4 percent from 3.5 percent in the previous month, in line with expectations.

While the French CAC 40 Index is down by 0.4 percent, the German DAX Index is down by 0.3 percent and the U.K.'s FTSE 100 Index is down by 0.2 percent.

ASML Holding, Infineon Technologies have tumbled after the U.S. government imposed new export restrictions on Nvidia's H20 AI chips, requiring a license for shipments to China.

Ipsen SA, a specialty-care biopharmaceutical company, has also slumped despite delivering strong sales in the first quarter of 2025 and confirming its full-year guidance.

Meanwhile, Heineken NV has rallied. The world's second largest brewer confirmed its annual outlook after reporting better-than-expected first quarter results.

Sartorius AG has also surged. After posting better-than-expected first quarter results, the pharmaceutical equipment supplier said it aims to be more profitable in 2025.

U.S. Economic News

Retail sales in the U.S. saw a sharp increase in the month of March, according to a report released by the Commerce Department on Wednesday.

The Commerce Department said retail sales shot up by 1.4 percent in March after inching up by 0.2 percent in February. Economists had expected retail sales to jump by 1.3 percent.

The surge by retail sales partly reflected a significant rebound by sales by motor vehicles and parts dealers, which soared by 5.3 percent in March after tumbling by 1.6 percent in February.

Excluding the sharp increase in auto sales, retail sales rose by 0.5 percent in March after climbing by 0.7 percent in February. Ex-auto sales were expected to rise by 0.3 percent.

At 9:15 am ET, the Federal Reserve is scheduled to release its report on industrial production in the month of March. Industrial production is expected to dip by 0.2 percent in March after climbing by 0.7 percent in February.

The National Association of Home Builders is due to release its report on homebuilder confidence in the month of April at 10 am ET. The housing market index is expected to fall to 37 in April after slumping to 39 in March.

Also at 10 am ET, the Commerce Department is scheduled to release its report on business inventories in the month of February. Business inventories are expected to increase by 0.2 percent in February after rising by 0.3 percent in January.

The Energy Information Administration is due to release its report on oil inventories in the week ended April 11th at 10:30 am ET. Crude oil inventories are expected to decrease by 1.7 million barrels after climbing by 2.6 million barrels in the previous week.

At 12 pm ET, Cleveland Federal Reserve President Beth Hammack is scheduled to speak on "Fed 101" and participate in a moderated question-and-answer session before the "Columbus Metropolitan Club Weekly Forum: Insights from Cleveland Fed President Beth Hammack" event.

Federal Reserve Chair Jerome Powell is due to speak on the economic outlook before the Economic Club of Chicago at 1:30 pm ET.

At 7 pm ET, Kansas City Federal Reserve President Jeffrey Schmid is scheduled on the economy and community banking with Federal Reserve Bank of Dallas President Lorie Logan before a Global Perspectives event.

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