By Caitlin McCabe

A tech-stock rout fueled by trade restrictions deepened Wednesday afternoon, with the Nasdaq dropping 3% and Nvidia's decline approaching 9%.

Nvidia, the third-largest U.S. company by market value, warned late Tuesday that it will take a $5.5 billion charge after the U.S. said it will need a license to export H20 processors to China and other countries. These less-powerful AI chips had been designed to comply with American export controls.

The U.S. government confirmed the restrictions, and said it had put similar curbs on rival AMD. Meanwhile, stocks took another turn lower after Federal Reserve Chair Jerome Powell gave remarks on the economic outlook this afternoon.

He warned that the central bank could face difficult trade-offs in trying to cushion the U.S. economy from the fallout of President Trump's trade war.

The S&P 500 recently stood more than 2% lower, while the Dow Jones Industrial Average fell around 1.5%.

Earlier Wednesday, Commerce Department data suggested U.S. consumers front-loaded purchases during March. Retail sales surged 1.4% last month, as car buyers rushed to dealerships to get ahead of auto tariffs. The rise was even bigger than expected.

In tech, another industry linchpin also rattled investors. ASML, whose huge, costly machines are needed to make the most advanced chips, reported much weaker-than-expected orders and warned about tariff-related disruption. Shares fell more than 5%.

Trade turmoil is also hitting one of the country's oldest industries: Shipping. Shares of J.B. Hunt Transport Services lost more than 7%--one of the worst performances in the S&P 500--after the company reported on Tuesday an 8% drop in net earnings in the first quarter. The company blamed slower demand from retailers caused by uncertainty over tariffs.

Wall Street's fear gauge, the Cboe Volatility Index, jumped after falling for three trading days. The dollar, meanwhile, extended its stretch of weakness.

Wrangling over tariffs continued, with state leaders in California moving to sue the Trump administration. And President Trump said he would join trade talks with a Japanese delegation.

Beijing named a new top trade negotiator, a former ambassador to the World Trade Organization. New data showed China was able to sustain its growth rate in the past quarter, helped by a surge of exports by U.S. importers in anticipation of new tariffs. Major indexes in Asia and Europe declined.

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(END) Dow Jones Newswires

April 16, 2025 14:22 ET (18:22 GMT)

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