U.S. stocks fell sharply on Wednesday, primarily due to Nvidia's warning about new U.S. export restrictions. Nvidia stated that the new restrictions could cost the company up to $5.5 billion, further exacerbating market unease. Meanwhile, in a speech at the Economic Club of Chicago, Federal Reserve Chairman Powell said that U.S. economic growth appears to be slowing, and higher-than-expected tariffs could lead to rising inflation and slower economic growth. Powell also mentioned that the Fed would decide whether to adjust interest rates after obtaining more data on the economic outlook.
The stock market saw further sell-offs following Powell's speech, having already been under significant pressure from the plummeting share prices of Nvidia and other chip manufacturers. The Dow Jones Industrial Average fell by 1.73%, closing at 39,669.39 points; the S&P 500 dropped by 2.24%, ending at 5,275.70 points; and the Nasdaq declined by 3.07%, closing at 16,307.16 points, after briefly dipping to 16,066.46 points during the session.
Meanwhile, Wall Street's fear gauge, the Cboe Volatility Index, rose to 32.64, indicating growing market unease. Nvidia's stock dropped by 6.9%, and the semiconductor index also decreased by 4.1%. AMD was similarly affected by the new U.S. export restrictions, with its stock plunging by 7.3%.
Additionally, Dutch chip equipment manufacturing giant ASML warned that the uncertainty over tariffs has increased the risk to its business outlook. Market uncertainty and corporate concerns over the impact of tariffs have led to a downbeat investor sentiment, putting overall pressure on the market.
