Asian stocks edged lower and US equity-index futures slid as trade conflicts showed no signs of abating, with Nvidia Corp. saying the US put new restrictions on some chip exports to China.
Contracts for the Nasdaq 100 fell more than 1.4% in early trading and S&P 500 futures dropped 0.9% after Nvidia slumped in after-hours trading. Gold, a safe haven asset that tends to gain when risk assets drop, hit a new record on Wednesday. Bonds held on to the previous session’s gains driven by a Treasury official’s comment on potential rule change that could lower trading costs for banks. The dollar slipped.
Traders were whiplashed again by a slew of tariff headlines, as US President Donald Trump also launched a probe into the need for levies on critical minerals. Flip flops on tariff policies have roiled global markets this month as investors struggle to take long-term positions due to the unpredictability of announcements from Washington.
“We would advise investors to avoid making hard and fast assumptions about how tariff developments will ultimately play out in the economy and on corporate profits,” said Anthony Saglimbene at Ameriprise. “Instead, we suggest investors prepare for a range of possible intermediate-term outcomes that include slow-to-positive economic and profit growth, and scenarios of slow-to-negative growth.”
In after-market trading, Nvidia extended its decline to more than 5% after saying the US government will begin requiring a license to export the company’s H20 chips to China, an escalation of restrictions that the company has publicly opposed. The company warned that it will report about $5.5 billion in charges during the fiscal first quarter from “inventory, purchase commitments and related reserves” tied to the H20 line.
The European Union and US struggled to bridge trade differences this week as White House officials said the bulk of the US tariffs imposed on the bloc won’t be removed.
Meanwhile, Trump urged China to reach out to him in order to kick off negotiations after the nation ordered its airlines not to take any further deliveries of Boeing Co. jets. The Trump administration may use tariff negotiations to try to pressure U.S. trading partners to limit dealings with China, the Wall Street Journal reported, citing people with knowledge of the conversations.
Chinese equities are also vulnerable ahead of a fresh wave of economic data that’s expected to reinforce concerns over an uneven recovery, with an index of US-listed Chinese shares falling for the first time in three sessions. First quarter GDP due Wednesday is forecast to show slowing momentum, even before the full impact of tariffs is felt, while retail sales will likely show consumption is anemic.
“The growth data from China released in the middle of the session could shape the trading day,” said Michael McCarthy, a strategist at Moomoo in Sydney. “Market risks on these releases look one-sided, with any miss likely to spark selling, while better-than-expected growth is likely to be discounted due to the trade dispute.”
High uncertainty surrounding US trade policy and a spike in financial-market volatility has unsettled global investors over the past few weeks. Sentiment regarding economic prospects is the most negative in three decades, yet fund managers’ pessimism isn’t fully reflected in their asset allocation which could mean more losses for US stocks, a Bank of America Corp. survey showed.
Fund managers are “max bearish on macro, not quite max bearish on the market,” strategists led by Michael Hartnett wrote in a note. “Peak fear” is not yet reflected in cash allocations, they added.
Investors are also gearing up for Federal Reserve Chair Jerome Powell’s comments on the economy later Wednesday.
In commodities, oil steadied after a modest decline on Tuesday.
Contracts for the Nasdaq 100 fell more than 1.4% in early trading and S&P 500 futures dropped 0.9% after Nvidia slumped in after-hours trading. Gold, a safe haven asset that tends to gain when risk assets drop, hit a new record on Wednesday. Bonds held on to the previous session’s gains driven by a Treasury official’s comment on potential rule change that could lower trading costs for banks. The dollar slipped.
Traders were whiplashed again by a slew of tariff headlines, as US President Donald Trump also launched a probe into the need for levies on critical minerals. Flip flops on tariff policies have roiled global markets this month as investors struggle to take long-term positions due to the unpredictability of announcements from Washington.
“We would advise investors to avoid making hard and fast assumptions about how tariff developments will ultimately play out in the economy and on corporate profits,” said Anthony Saglimbene at Ameriprise. “Instead, we suggest investors prepare for a range of possible intermediate-term outcomes that include slow-to-positive economic and profit growth, and scenarios of slow-to-negative growth.”
In after-market trading, Nvidia extended its decline to more than 5% after saying the US government will begin requiring a license to export the company’s H20 chips to China, an escalation of restrictions that the company has publicly opposed. The company warned that it will report about $5.5 billion in charges during the fiscal first quarter from “inventory, purchase commitments and related reserves” tied to the H20 line.
The European Union and US struggled to bridge trade differences this week as White House officials said the bulk of the US tariffs imposed on the bloc won’t be removed.
Meanwhile, Trump urged China to reach out to him in order to kick off negotiations after the nation ordered its airlines not to take any further deliveries of Boeing Co. jets. The Trump administration may use tariff negotiations to try to pressure U.S. trading partners to limit dealings with China, the Wall Street Journal reported, citing people with knowledge of the conversations.
Chinese equities are also vulnerable ahead of a fresh wave of economic data that’s expected to reinforce concerns over an uneven recovery, with an index of US-listed Chinese shares falling for the first time in three sessions. First quarter GDP due Wednesday is forecast to show slowing momentum, even before the full impact of tariffs is felt, while retail sales will likely show consumption is anemic.
“The growth data from China released in the middle of the session could shape the trading day,” said Michael McCarthy, a strategist at Moomoo in Sydney. “Market risks on these releases look one-sided, with any miss likely to spark selling, while better-than-expected growth is likely to be discounted due to the trade dispute.”
High uncertainty surrounding US trade policy and a spike in financial-market volatility has unsettled global investors over the past few weeks. Sentiment regarding economic prospects is the most negative in three decades, yet fund managers’ pessimism isn’t fully reflected in their asset allocation which could mean more losses for US stocks, a Bank of America Corp. survey showed.
Fund managers are “max bearish on macro, not quite max bearish on the market,” strategists led by Michael Hartnett wrote in a note. “Peak fear” is not yet reflected in cash allocations, they added.
Investors are also gearing up for Federal Reserve Chair Jerome Powell’s comments on the economy later Wednesday.
In commodities, oil steadied after a modest decline on Tuesday.
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