The Nasdaq Marketsite is seen during morning trading on April 7, 2025 in New York City.
Michael M. Santiago | Getty Images
Stocks fell sharply on Wednesday, as a stark warning from Nvidia roiled global tech and concerns from Federal Reserve Chair Jerome Powell about the economic impact of tariffs raised alarm among skittish investors.
The Dow Jones Industrial Average lost 908 points, or 2.1%. The S&P 500 dropped 3%, led down by the information technology sector. The Nasdaq Composite pulled back 4.3%, sliding closer to bear market territory.
Shares of Nvidia sank 10%, on track for its worst day since January after the chip giant said it will post a $5.5 billion quarterly charge related to exporting its H20 graphics processing units to China and other nations. The company said in a filing that the U.S. government required a license to send chips from the U.S. to China.
The stock was also under pressure after the New York Times reported that President Donald Trump’s administration was taking steps to crack down on Chinese startup DeepSeek, to which Nvidia provides chips.
Nvidia, 1-day
Other chipmakers followed Nvidia lower, with the VanEck Semiconductor ETF (SMH) down more than 6%. AMD slid more than 8%, while Micron Technology slid more than 3%. Adding to the broader chip decline was a disappointing earnings report from ASML, whose U.S.-listed shares plunged more than 7%.
“The S&P 500 is just much more of a technology-driven index than it has been in the past,” said Zachary Hill, head of portfolio management at Horizon Investments. “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.”
Tariff worries rattle markets again
Stocks slid to session lows in afternoon trading after Fed Chair Powell said President Donald Trump’s tariffs could pose a challenge for the central bank. Powell said during a question-and-answer session that levies could drive up inflation in the near-term and are “likely to move us further away from our goals.”
“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said in prepared remarks before the Economic Club of Chicago. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”
Financial markets have been rattled since Trump announced levies on many countries earlier this month. While some of those duties were put on hold for 90 days last week, China was excluded from that delay. Trump announced an exemption on tariffs against smartphone and PC imports over the weekend, though he later hinted that this was only temporary.
Since Trump administration first announced its “reciprocal” tariffs on April 2, the S&P 500 and Nasdaq Composite have each dropped more than 7%. The Dow has lost about 6%.