U.S. stock futures experienced a decline as a warning from Nvidia unsettles the technology sector, while concerns over tariffs continue to loom. U.S. stock index futures experienced a decline on Tuesday evening, with the technology sector facing the steepest losses. This downturn follows a warning from artificial intelligence leader Nvidia regarding a significant earnings impact due to stricter government restrictions on exports to China.
Broader markets faced pressure due to ongoing uncertainty surrounding President Donald Trump’s intentions regarding additional trade tariffs, particularly affecting the electronics and pharmaceuticals sectors. The persistent trade conflict between Trump and China continues to create uncertainty among investors. Futures declined following a somewhat lackluster day on Wall Street, as enthusiasm surrounding a temporary halt in Trump’s tariffs diminished, leaving markets in a state of uncertainty regarding his intentions for additional duties.
Market participants are closely monitoring upcoming first quarter earnings reports and additional indicators regarding the U.S. economy, which has contributed to a cautious approach towards risk-taking. S&P 500 Futures experienced a decline of 0.8%, settling at 5,384.0 points, while Nasdaq 100 Futures saw a drop of 1.3%, reaching 18,718.75 points. Dow Jones Futures experienced a decline of 0.4%, settling at 40,414.0 points.
NVIDIA Corporation experienced a 6% decline in aftermarket trading following the announcement that the government has imposed additional restrictions on the export of its H20 chips to China. The company has announced that it will now necessitate a license for the export of its H20 chip to China. Nvidia’s H20 chip has emerged as the company’s leading product in China, strategically developed to comply with the export controls previously established by the Biden administration. Nvidia’s recent announcement has sent shockwaves through the semiconductor industry and technology stocks, raising concerns about potential further export restrictions on China, which is currently engaged in a contentious trade war with Washington.
Following Nvidia’s announcement, shares of other chipmakers and AI-related stocks experienced a decline. Intel Corporation experienced a decline of 1.9%, while Broadcom Inc saw a drop of 3.4%. Additionally, TSMC, a key supplier for Nvidia, reported a decrease of 2%. AMD, a competitor to Nvidia, is expected to encounter comparable restrictions, resulting in a nearly 7% decline in its stock value. Concerns stemming from losses in chipmakers have rattled the broader technology sector, leading to declines of over 1% for major players like Apple and Tesla. Investors expressed concern regarding the potential ramifications of a U.S.-China trade war on technology supply chains, as an intensified conflict is expected to bring additional challenges.
Wall Street indexes closed with modest declines on Tuesday, as investor sentiment remained cautious amid concerns regarding Trump’s proposed additional trade tariffs. The ongoing trade conflict between the United States and China has created significant volatility in the markets, as President Trump emphasized that the responsibility now lies with China to initiate negotiations. Concerns are mounting among investors that an extended trade conflict could hinder economic expansion and possibly lead to a recession in the current year.
The S&P 500 experienced a decline of 0.2%, closing at 5,396.60 points, while the NASDAQ Composite also saw a minor decrease, settling at 16,823.17 points. The Dow Jones Industrial Average experienced a decline of 0.4%, closing at 40,368.96 points. Recent sessions on Wall Street have seen a boost, driven by some encouraging first-quarter earnings reports. In the upcoming days, a number of companies are scheduled to release their earnings reports. Notably, chip giant ASML Holding NV, pharmaceutical leader Abbott Laboratories, and insurance provider Progressive Corp (NYSE:PGR) will be reporting on Wednesday.
On the economic landscape, the U.S. is set to release retail sales and industrial production figures this Wednesday. Federal Reserve Chair Jerome Powell is scheduled to address the public later today.