U.S. stocks fall after Nvidia warning; retail sales soared in March

Investing.com-- U.S. stocks fell Wednesday, with healthy retail sales were outweighed by sharp losses in the tech sector after artificial intelligence major Nvidia flagged a sizable earnings hit from tighter government curbs on exports to China. 

At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average fell 125 points, or 0.3%, the S&P 500 index dropped 50 points, or 0.9%, and the NASDAQ Composite slipped 295 points, or 1.7%.  

Nvidia falls on hefty charge

Nvidia (NASDAQ:NVDA) stock fell over 6% after the AI darling said it would be hit by $5.5 billion in charges following a Commerce Department decision to limit exports of its H20 AI chip to its key Chinese market.

The H20 is the main AI chip Nvidia is permitted to sell in China under restrictions originally imposed by the Biden administration, as the U.S. sought to close off Beijing’s access to cutting-edge advancements in AI tech.

Nvidia’s announcement spooked other chipmakers and technology stocks, amid concerns over even more export restrictions on China, which is embroiled in a bitter trade war with Washington. 

Other chipmakers and AI stocks, including Intel (NASDAQ:INTC), AMD (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO), also fell, while major Nvidia supplier TSMC (NYSE:TSM) retreated.

Elsewhere, Travelers Companies (NYSE:TRV) stock rose 3% despite the insurer’s profit plunging 60% in the first quarter as its exposure to the Los Angeles wildfires led to a record catastrophe loss of over $2 billion.

United Airlines (NASDAQ:UAL) stock gained 2% after the carrier said forward bookings were stable so far in the current quarter despite tariff-induced economic uncertainty.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

Hertz (NASDAQ:HTZ) stock soared over 14% following the news that Bill Ackman’s Pershing Square Capital Management disclosed a significant stake in the car rental company. 

Alphabet (NASDAQ:GOOGL) stock dropped 2% with its Google unit facing a class action lawsuit in the U.K., for potential damages exceeding £5 billion ($6.6 billion), over allegations the U.S. tech giant has been abusing its near-total dominance in the online search market.

Retail sales surged in March 

U.S. retail sales surged in March, increasing 1.4% last month after an unrevised 0.2% gain in February, as households boosted purchases of motor vehicles ahead of tariffs.

Motor vehicle manufacturers reported a big jump in auto sales in March, attributed by some to a rush by buyers "to try and beat the tariffs."

Investors will also be listening to a speech from Federal Reserve Chair Jerome Powell later Wednesday, with markets keen to hear his assessment of the U.S. economy following a raft of developments around Trump’s tariffs.

Earlier this month, Powell said there was a lot "waiting and seeing going on," including by the Fed. He added that this tactic seemed "like the right thing to do at a time of elevated uncertainty."

Crude pushes higher

Oil prices edged higher Wednesday, although sentiment remains fragile with traders fretting over the likely impact of the trade uncertainty on global growth, and thus demand for crude.

At 09:35 ET, Brent futures climbed 1.0% to $65.33 a barrel, and U.S. West Texas Intermediate crude futures gained 1.1% to $61.99 a barrel.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

The International Energy Agency on Tuesday joined the Organization of the Petroleum Exporting Countries in cutting its forecast for global oil demand this year, citing Trump’s tariffs on trading partners and their retaliatory moves.

The IEA forecast crude demand to rise by 730,000 barrels per day in 2025, sharply lower than the 1.03 million bpd expected last month, and the slowest growth rate for five years.

(Ambar Warrick contributed to this article.)

Should you invest $2,000 in INTC right now?

Before you buy stock in INTC, consider this: ProPicks AI are 6 easy-to-follow model portfolios created by Investing.com for building wealth by identifying winning stocks and letting them run. Over 150,000 paying members trust ProPicks to find new stocks to buy – driven by AI. The ProPicks AI algorithm has just identified the best stocks for investors to buy now. The stocks that made the cut could produce enormous returns in the coming years. Is INTC one of them?

Reveal Undervalued Stocks Now