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The Nasdaq tumbles as Nvidia takes a $5.5 billion hit in the U.S.-China chip war

Catherine Baab

Wed, Apr 16, 2025, 5:30 AM 2 min read

The CNN (WBD) Fear & Greed Index remains in “extreme fear” territory — a mood that’s proven hard to shake since President Donald Trump’s tariff barrage earlier this month. It should come as no surprise: This is a market increasingly driven by policy whiplash, cheerleading soundbites, and dropped hints of trade negotiations. Mixed signals, selective leaks, and sudden reversals — often via social media or offhand remarks — are proving as influential as official announcements.

And it’s not just the policy that’s unpredictable. The choreography is, too.

The most closely watched story Wednesday centers on Nvidia (NVDA), which disclosed a $5.5 billion charge tied to new U.S. government restrictions on exporting its H20 AI chips to China. The Biden administration originally designed export controls to curtail China’s access to advanced AI chips — but under Trump, the policy has sharpened. Nvidia’s stock was down about 5% before the bell, and given that it’s the third largest U.S. company by market capitalization, Wednesday’s market could be dramatic.

Also in chip news, semiconductor equipment giant ASML (ASML) reported first-quarter sales of €7.7 billion — below analyst expectations — and flagged “greater uncertainty” ahead due to U.S.-China tariff policies. ASML, which makes the machines essential to high-end chip manufacturing, has seen its stock fall by 28% over the last year despite the AI boom.

Elsewhere, China posted 5.4% GDP growth for the first quarter, matching the prior quarter. Export activity surged as companies rushed to ship goods ahead of expected new U.S. tariffs. Beijing also named a new top trade negotiator. Still, market watchers seem to see little clarity ahead.

Later Wednesday, Federal Reserve Chair Jerome Powell is scheduled to speak on the economic outlook, while March retail sales data is due — offering a window into consumer behavior before the latest tariff escalation.

Abbott Laboratories (ABT), CSX (CSX), Kinder Morgan (KMI), and Prologis (PLD) all report earnings Wednesday as well, offering reads on key sectors from healthcare to logistics and energy infrastructure.

This backdrop follows a downbeat session Tuesday, when the S&P 500 slipped 0.22%, the Dow dropped 0.36%, and the Nasdaq dipped 0.05%. The declines were modest, but the broader picture remains bleak: All three major indexes are still well below their April 1 closes, before Trump’s “Liberation Day” tariff blitz sent markets reeling. Boeing and the automakers led Tuesday’s losses.

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