Wall Street index futures dropped on Wednesday and chip darling Nvidia slumped after the company flagged steep charges from new U.S. curbs on chip exports to China, fuelling worries about the fallout of an escalating trade war.

Retail sales increased 1.4% in March, greater than expected.

Market Snapshot

At 7:45 a.m. ET, Dow e-minis were down 12 points, or 0.03%, S&P 500 E-minis were down 35.75 points, or 0.66%, and Nasdaq 100 E-minis were down 244.5 points, or 1.3%.

Pre-Market Movers

Nvidia was down 6% after disclosing in a filing with the Securities and Exchange Commission that sales of its H20 chips to China would require a license "for the indefinite future" from the U.S. Department of Commerce. Nvidia said it would record charges in its fiscal first quarter of up to $5.5 billion for H20 inventory and canceled sales.

Fellow chip makers traded lower in premarket trading. Broadcom was down 4.1%, Micron Technology declined 3.9%, and Advanced Micro Devices fell 7%. The U.S. government will require licenses for the export of AMD's MI308 AI chips.

Shares of ASML Holding fell 4.5% after the Dutch semiconductor-equipment maker issued underwhelming sales guidance, saying tariffs have increased uncertainty in its market. In the first quarter, ASML reported sales of EUR7.74 billion ($8.81 billion), up from EUR5.29 billion a year earlier, but slightly shy of analysts' forecasts of EUR7.77 billion according to FactSet. For the current second quarter, the company said it expects sales of between EUR7.2 billion and EUR7.7 billion, below analysts' forecasts of EUR7.8 billion.

United Airlines reported first-quarter adjusted earnings of 91 cents a share, topping analysts' estimates of 74 cents, and the carrier said it "expects resilient earnings" in the second quarter and full year despite an uncertain macroeconomic environment. However, United sees the economic picture as so cloudy that it issued two full-year outlooks, one if things remain stable and the other if the U.S. falls into a recession. United also said it planned to reduce domestic capacity by about 4% starting in the third quarter on weaker demand. Shares of the carrier were rising 7%.

J.B. Hunt Transport Services reported first-quarter earnings and revenue that fell from a year earlier and shares of the trucking and logistics company were down 6.4%. J.B. Hunt said revenue fell to $2.92 billion from $2.94 billion, attributing the decline to, among other things, its truckload segment posting an 8% decrease in year-over-year gross revenue per load.

Omnicom fell 2.2% in premarket trading. The marketing, advertising and corporate communications company reported first-quarter adjusted earnings of $1.70 a share, beating estimates of $1.65. Net profit in the quarter fell to $1.45 a share from $1.59 on costs related to Omnicom's acquisition of Interpublic, which is expected to close in the second half of the year.

Tesla was down 2.1% in premarket trading. The electric-vehicle maker reports first-quarter earnings next week and investors recently have been consumer with news on with tariffs, sales, and Tesla protests.

Travelers Cos. was rising 4.1%. The insurance giant reported first-quarter core earnings of $1.91 a share, down from $4.69 a year earlier but better than estimates of 79 cents even after incurring massive losses from California wildfires.

Trump Media & Technology Group was down 1.6% in premarket trading. The social media company majority-owned by President Donald Trump joined with two investment firms to launch Truth Social-branded Separately Managed Accounts that it said will "offer investors access to curated, thematic investment strategies rooted in American values and priorities." The stock closed up 5.4% on Tuesday.

Market News

China Open to Talks If Trump Shows Respect, Names Point Person

China wants to see a number of steps from President Donald Trump’s administration before it will agree to trade talks, including showing more respect by reining in disparaging remarks by members of his cabinet, according to a person familiar with the Chinese government’s thinking.

Other conditions include a more consistent US position and a willingness to address China’s concerns around American sanctions, said the person, who asked not to be identified to discuss internal thinking.

California's Newsom Says State To Sue Over Trump's Tariffs

California Governor Gavin Newsom said his state is suing to halt Donald Trump’s tariffs, setting up a high-stakes legal challenge to the president’s landmark effort to overhaul global trade.

The state will file a complaint Wednesday in San Francisco federal court challenging Trump’s use of emergency powers to enact broad tariffs against Mexico, China and Canada, according to a statement issued by Newsom’s office. Officials cited harm to consumers and businesses in the world’s fifth-largest economy.

American Shoppers Flock to Chinese Apps on Tariff Fears

Americans are scouring Chinese e-commerce apps for cheap handbags, yoga pants and wallets as shoppers fear homegrown platforms will hike prices due to tariffs.

Viral videos touting the high quality, and cheap prices, of goods available on Chinese services have spurred Americans to download apps such as DHgate, which climbed to second place in the free app rankings in Apple Inc.’s US App Store, according to data from SensorTower. Shares of CTS International Logistics Corp., which cooperates with DHgate, rose by the 10% daily limit Wednesday in Shanghai.

TSMC To Raise U.S. Fab Prices By 30%

According to Digitimes, TSMC may increase prices by 30% as Apple, AMD, and NVIDIA ramp up chip orders at its U.S. fabs.