Markets Slide Amid Trade Tensions, Nvidia Hit by Export Curbs, Investors Eye Powell’s Speech

Image Source : Krish Capital Pty Ltd

Index Update

S&P 500 down 1.3%, Nasdaq 100 dropping 2.1%, and Dow Jones off by about 280 points, as mounting trade tensions raised concerns over corporate profits. Nvidia shares slid over 6% in premarket after announcing a $5.5 billion revenue hit due to U.S. restrictions on AI chip sales to China. Investors are also watching earnings from Abbott and Travelers, as well as key U.S. retail sales, industrial production data, and a speech from Fed Chair Powell.

Market Movers

On Tuesday, the top gainers were Mural Oncology plc (+123.3%), followed by TMC the metals company Inc (+26.15%). On the contrary Applied Digital Corporation (-14.15%) and Rent the Runway, Inc (-9.28%) declined the most the same day.

Commodities Update

WTI and Brent crude oil futures rose to $62 and $65 per barrel, supported by hopes for renewed US-China trade talks. China signaled openness to negotiations, easing market tensions despite bearish signals. The IEA cut its 2024 demand forecast, warning of a supply glut through 2026, while rising OPEC+ output and potential Iranian exports added pressure. US crude inventories unexpectedly rose by 2.4 million barrels, though declines at Cushing and in fuel stockpiles softened the impact.

Gold neared a record $3,290 per ounce amid US trade policy uncertainty and a weaker dollar. Safe-haven demand rose after Trump proposed tariffs on critical mineral imports, raising tensions with suppliers like China. Bullish momentum was fueled by ETF inflows and central bank buying, with markets now eyeing US retail sales data and Fed Chair Powell’s speech for further guidance.

Macro Update

The U.S. 10-year Treasury yield held around 4.33% on Wednesday as investors awaited Fed Chair Powell's speech for clues on policy amid slowing growth and tariff-related inflation risks. Market uncertainty was heightened by President Trump’s probe into new tariffs on critical mineral imports, mostly sourced from China, fueling trade war concerns. Investors are also watching for updates on trade talks and upcoming U.S. retail sales data for insight into consumer sentiment.

Futures Update

U.S. stock futures declined as investors reacted to President Trump’s tariff plans and new restrictions on AI chip exports to China. Nvidia shares dropped following the U.S. Commerce Department’s move to curb exports of its key H20 AI chip. Major indexes, including the Dow, S&P 500, and Nasdaq 100, all pointed lower. The pullback followed earlier market losses, as initial optimism from strong bank earnings faded amid ongoing concerns about trade policy. While Bank of America and Citigroup reported solid trading revenue, both flagged uncertainty around the economic outlook due to tariff-related risks. Investors are also watching upcoming corporate earnings, retail sales data, and comments from Fed Chair Powell.

After a volatile session on Monday where stocks ended significantly higher, trading on Tuesday continued to lack direction. The major averages fluctuated around the unchanged line before finishing slightly lower. The S&P 500 index dropped by 9.34 points (0.17%), closing at 5396.62. The index faced resistance at the falling 21-period simple moving average, suggesting it may consolidate in the near term. Support is at 5,268 and resistance is at 5,527. Additionally, the 14-period relative strength index (RSI) is close to its midpoint, indicating a neutral bias, which might suggest a minor pullback in the near future.