Market Overview

Wednesday saw stocks decline as investors reacted to a significant warning from Nvidia and ongoing concerns about global trade.

• The Dow Jones Industrial Average fell 107 points, a 0.3% decrease.

• The S&P 500 experienced a 1% drop.

• The Nasdaq Composite declined by 1.9%.

Nvidia’s News Shakes Chip Sector

Nvidia shares plummeted 6% after the company announced it would record a $5.5 billion quarterly charge. This charge is linked to the export of its H20 graphics processing units to China and other countries.

The company stated in a filing that the U.S. government now requires a license to ship chips from the U.S. to China, impacting its operations.

Broader Chip Sector Feels the Pressure

Other chip manufacturers followed Nvidia’s downward trend:

• The VanEck Semiconductor ETF (SMH) decreased by almost 4%.

• AMD shares fell by more than 6%.

• Micron Technology saw a 3% decline.

Adding to the negative sentiment was a disappointing earnings report from ASML, with U.S.-listed shares dropping over 5%.

Big Tech Underperforms

Major technology companies also experienced downward pressure, pulling CNBC’s Magnificent Seven Index more than 2% into negative territory.

• Meta Platforms declined by 2%.

• Microsoft and Tesla each fell by more than 1%.

Analyst Insights

Zachary Hill, head of portfolio management at Horizon Investments, commented on the market’s reliance on technology stocks:

The S&P 500 is just much more of a technology-driven index than it has been in the past. It has a disproportionate impact, both to the upside and downside, as we’ve seen.We saw it last week, and now we’re seeing it reverse a little bit today.
Zachary Hill, Horizon Investments

Global Trade Tensions Add to Uncertainty

Wednesday’s market activity occurred as investors grapple with increasing global trade tensions.

• The U.S. has announced tariffs on numerous countries, including China.

• Some of these levies were temporarily suspended for 90 days last week, but duties on Chinese imports remain in effect.

• President Donald Trump recently announced an exemption on tariffs for smartphone and PC imports, but suggested this measure might be temporary.

Market Performance Since Tariff Announcements

Since the initial announcement of “reciprocal” tariffs on April 2:

• The S&P 500 and Nasdaq Composite have each decreased by approximately 6%.

• The Dow has fallen by about 5%.