US Markets Face Tech-Led Sell-Off Amid Tariff Fears and Fed Caution

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Index Update - US equities tumbled Wednesday as tech stocks led a broad sell-off, with the Nasdaq plunging 3% and the S&P 500 dropping 2.2%, after Nvidia warned of a $5.5 billion hit from new US export restrictions on AI chips to China. The route deepened as Fed Chair Jerome Powell cautioned that tariffs could fuel inflation and slow growth, disappointing investors hoping for clearer signals on rate cuts. Major chipmakers like AMD and Micron also slid, while retail sales jumped as consumers rushed to buy ahead of new tariff.

Pre-Market Movers - TSMC rose 3% on strong guidance, helping stabilize the chip sector after Nvidia’s export embargo and weak ASML results had triggered heavy losses earlier in the week.

Macro Update: Uncertainty persisted over potential tariffs on copper, semiconductors, pharmaceuticals, and lumber, as the White House had yet to confirm new measures, though negotiations with Japan were reportedly imminent. Risk sentiment was further dampened after Trump criticized Fed Chair Powell, following Powell’s warning that tariffs could hinder growth and stoke inflation.

Commodity Update - Silver prices eased to around $32.50 per ounce on Thursday, retreating from recent two-week highs as traders booked profits after a strong rally fueled by safe-haven demand amid trade tensions. The pullback comes amid ongoing uncertainty from President Trump’s tariff threats and China’s conditional willingness to resume talks. Fed Chair Powell’s caution on tariffs’ impact on inflation and growth also weighed on sentiment. Despite the dip, silver remains supported by supply deficits and robust industrial demand.

Futures Update - US stock futures were mixed on Thursday, the final trading day of the week, as markets attempted to recover from sharp losses in the previous session amid ongoing concerns over President Trump’s tariff policies and key corporate earnings. While S&P 500 and Nasdaq 100 futures pointed higher, up 0.41% and 0.62% respectively, Dow Jones futures lagged, down 1.44%, weighed by a 20% plunge in UnitedHealth futures following disappointing results, which dragged the Dow about 1% lower. 

Stocks experienced a sharp decline in the early session on Wednesday, with further drops throughout the trading day. Nvidia fell 6% after incurring substantial charges due to new trade restrictions on chip sales to China, negatively impacting the entire tech sector. On a brighter note, retail sales exceeded expectations. The S&P 500 index dropped by 120.91 points (2.24%), closing at 5,275.71. However, the index found support at critical levels and appears to be on an upward path, indicating potential short-term gains, with support at 5,268 and resistance at 5,527. Additionally, the 14-period RSI has bounced back from oversold conditions and may continue to rise in the near future.