Stock Market Declines Amid Tariff Warnings; Bitcoin Remains Resilient

U.S. stock markets fell sharply due to Nvidia’s $5.5B charge from tariffs and Powell’s inflation warnings. The S&P 500, Dow, and Nasdaq all experienced significant declines, with tech stocks leading losses. Despite this, Bitcoin remained stable. Powell cautioned on the economic impacts of tariffs, while retail sales showed positive growth, indicating consumer anticipation before tariff implementations.

U.S. stock markets experienced significant declines on Wednesday, primarily driven by Nvidia’s announcement of $5.5 billion in charges related to China. Federal Reserve Chair Jerome Powell raised concerns about how tariffs might elevate inflation and stifle economic growth. The S&P 500 slid by approximately 2.2%, the Dow Jones Industrial Average dropped 1.7%, and the Nasdaq Composite, heavily influenced by technology stocks, fell by around 3%, nearing bear market thresholds.

Nvidia’s shares fell nearly 10% after the company disclosed the impact of U.S. export restrictions on its H20 graphics processors, crucial for the Chinese market. Other semiconductor firms also faced declines; AMD shares were down 8%, Micron fell 3%, and ASML dropped over 7% as a result of disappointing earnings.

In stark contrast, Bitcoin (BTC) maintained its strength, hovering around the $84,000 mark, thus highlighting its resilience against market fluctuations. During a speech at the Economic Club of Chicago, Powell stated that the Federal Reserve would remain cautious regarding interest rate adjustments, indicating that tariffs might contribute to rising inflation and decelerating growth.

He acknowledged the potential for a difficult situation for the Fed if their objectives of sustaining stable prices and achieving full employment were to conflict. Meanwhile, recent retail sales data disclosed a 1.4% increase in March, the most substantial surge in two years, reflecting consumers’ inclination to purchase before tariffs take effect. Although tariffs for certain countries were delayed by the Trump administration, China remains unaffected. Treasury Secretary Scott Bessett suggested that more definitive information about trade policies could emerge within 90 days, although China indicated that negotiations would need to satisfy specific conditions.