U.S. stock futures moved lower on Wednesday as investors digested Nvidia’s sharp decline and braced for critical economic data and fresh earnings.
U.S. stock futures fell sharply in early Wednesday trading following news that Nvidia would record a $5.5 billion charge linked to export restrictions on its advanced H20 GPU chips. Meanwhile, market participants await key March retail sales data, alongside a fresh batch of first-quarter earnings.
According to early figures:
- Dow Jones Industrial Average futures dropped 328 points (-0.8%)
- S&P 500 futures lost 1.49%
- Nasdaq 100 futures fell 2.29%
Nvidia Stock Drops 6% After Announcing $5.5 Billion Charge
Shares of Nvidia slid more than 6% in after-hours trading Tuesday after the company revealed a $5.5 billion charge related to the export of its H20 graphics processing units (GPUs) to China and other countries.
According to the company’s SEC filing, the U.S. government now requires Nvidia to obtain a license before exporting its chips to certain foreign markets. This move casts uncertainty over Nvidia’s growth outlook, especially considering the H20 chip was designed specifically to comply with existing export rules.
The H20 chip, launched to serve the Chinese market under tightened U.S. restrictions, generated an estimated $12 billion to $15 billion in revenue in 2023 alone.
Wall Street Closes Lower After Muted Tuesday Session
Tuesday’s regular trading session saw modest declines across all three major indexes after two consecutive winning days:
- The Dow lost nearly 156 points (-0.4%)
- The S&P 500 slipped 0.2%
- The Nasdaq Composite ended just slightly lower
The recent calm contrasts sharply with the market volatility that began after the Trump administration announced reciprocal tariffs on April 2. Since then, the Dow and Nasdaq have each dropped about 4.4%, while the S&P 500 is down 4.8%.
El-Erian Warns: “Don’t Get Used to the Calm”
Mohamed El-Erian, Chief Economic Advisor at Allianz, warned that the current calm may be short-lived. Speaking to CNBC’s Closing Bell: Overtime, he noted:
“Fundamentally, things have not been resolved. The U.S.-China trade tensions persist, and there’s still friction between the administration and the Federal Reserve. So welcome the calmness—but let’s not get used to it.”
Eyes on March Retail Sales Report
A potential market catalyst arrives Wednesday morning with the release of the March U.S. retail sales report. Analysts polled by Dow Jones expect a 1.2% month-over-month increase, a sharp rise from February’s modest 0.2% gain.
This data comes at a time when consumers remain concerned about persistent inflation and the broader economic outlook. Investors will also be watching the industrial production and manufacturing output reports due later in the day.
Key Earnings Set for Wednesday
The earnings calendar remains active. Companies scheduled to report on Wednesday include:
- Travelers
- U.S. Bancorp
- Abbott Laboratories
- ASML
- Citizens Financial Group
Stocks Making Moves After Hours
Several companies saw significant after-hours movement on Tuesday:
- United Airlines: Jumped nearly 7% after reporting Q1 adjusted earnings of $0.91 per share, beating expectations of $0.76.
- J.B. Hunt: Shares fell 6% despite reporting a beat on both revenue and earnings.
- Interactive Brokers: Dropped 8% after missing earnings estimates with $1.88 per share versus expected $1.92.
Stay tuned for live updates as economic data and earnings continue to shape market sentiment.
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