Nvidia and chip stocks drag down the Nasdaq as markets slip on trade war woes.

Wall Street opened deep in the red Wednesday, with tech stocks leading the retreat as U.S.-China chip tensions spooked investors. The Nasdaq dropped 2.1%, the S&P 500 shed 1.3%, and the Dow slipped 0.7%. Losses rippled across sectors, dragging the Russell 2000 down 0.8%.

Nvidia stock plunged more than 6.5% after disclosing a $5.5 billion charge linked to fresh U.S. export restrictions on its H20 AI chips — once seen as a workaround for earlier bans. AMD (AMD) also fell, while chip equipment giant ASML missed Q1 revenue estimates and warned that escalating tariffs could cloud the global outlook through 2026.

Still, there were bright spots. Abbott Labs beat expectations with adjusted EPS of $1.09 and double-digit organic growth in its medical device division, including a 20% jump in diabetes-related products. Prologis, the world’s largest industrial REIT, met forecasts with $1.27 in core FFO and reaffirmed guidance — but noted rising customer caution.

Meanwhile, U.S. retail sales surged 1.4% in March, the biggest monthly gain since January 2023. Analysts say shoppers likely pulled purchases forward to avoid tariff-driven price hikes — think: customers loading up on TVs and T-shirts at Costco (COST) ahead of potential price pain.

Fed Chair Jerome Powell is set to speak in Chicago this afternoon — his second public appearance in as many weeks — as investors look for any clues on how the central bank is weighing strong retail data, tariff-driven uncertainty, and persistent inflation.

Futures pointed lower in early trading.

U.S. stock futures moved lower Wednesday morning as investors braced for another wave of geopolitical and earnings headlines. Nasdaq futures dropped more than 1%, with the S&P 500 off 0.5%, and the Dow Jones Industrial Average flat.

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 on Wednesday centres 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 capitalisation, Wednesday’s market could be dramatic.