Asian markets slid sharply on Wednesday as investors reacted to the escalating tech trade war between Washington and Beijing, with chipmaker Nvidia taking a major hit following fresh U.S. export restrictions.
Nvidia’s shares fell 6% in after-hours trading after the company warned that new U.S. licensing rules on exports to China could cost it up to $5.5 billion in lost revenue. The U.S. Commerce Department introduced new requirements overnight targeting Nvidia’s H20 and AMD’s MI308 AI chips, further tightening controls on high-tech exports to China.
The move marks the latest salvo in the ongoing U.S.-China tech conflict and comes as former President Donald Trump ordered a probe into potential tariffs on critical minerals imports, alongside ongoing reviews of pharmaceuticals and semiconductor products.
In response, China is reportedly ramping up retaliatory measures, including instructing domestic airlines to suspend Boeing aircraft deliveries. Meanwhile, Beijing has appointed a new trade envoy for upcoming negotiations with Washington. The White House said Trump remains open to a deal, but insisted China must make the first move.
The market reaction was swift. MSCI’s Asia-Pacific index outside Japan fell 1.4%, snapping a four-day rally, while Japan’s Nikkei dropped 1.6%. Hong Kong’s Hang Seng led regional losses with a 2.7% slump, and Chinese blue chips edged down 0.7% despite stronger-than-expected GDP data from earlier in April.
U.S. futures also pointed to a rough day ahead:
- S&P 500 futures fell 1.5%
- Nasdaq futures slipped 2.3%
- EURO STOXX 50 futures signaled a 1.5% drop at the open
Back on Wall Street, stocks ended marginally lower on Tuesday, with the Dow down 0.4%, while the S&P 500 and Nasdaq dipped slightly.
As uncertainty spreads, investors rushed into safe-haven assets. Gold jumped 2% to a new all-time high of $3,290 per ounce, with analysts at ANZ now forecasting it could hit $3,600 by year-end, suggesting risk-averse buying may only be beginning.
Currencies also reflected the shift in sentiment:
- The yen strengthened to 142.32 per dollar
- The Swiss franc gained 1.1%, trading at 0.8145 per dollar
- The euro climbed to $1.1364, while the pound rose to $1.3268
Meanwhile, oil prices slipped on concerns over slowing global growth:
- WTI crude fell 1.2% to $60.62
- Brent crude dropped 1.1% to $63.99
Bond markets held relatively steady. The 10-year U.S. Treasury yield remained at 4.325%, well below last week’s peak of 4.592%, and the 30-year yield stayed near 4.777%.
As the U.S. and China dig deeper into economic confrontation, investors are clearly bracing for a bumpy road ahead.
