AXP American Express Company

Stocks moved sharply lower early in the session on Wednesday and saw even further downside over the course of the trading day. The major averages all posted steep losses, with the tech-heavy Nasdaq under particularly heavy selling pressure.

The major averages climbed off their worst levels going into the end of the day but remained firmly negative. The Nasdaq plunged 516.01 points or 3.1 percent to 16,307.16, the S&P 500 tumbled 120.93 points or 2.2 percent to 5,275.70 and the Dow slumped 699.57 points or 1.7 percent to 39,669.39.

The sell-off on Wall Street came amid a steep drop by shares of Nvidia (NASDAQ:NVDA), with the AI darling plunging 6.9 percent on the day.

The slump by Nvidia came after the company said its first quarter results are expected to include up to approximately $5.5 billion of charges associated with its H20 integrated circuits.

Nvidia noted in an SEC filing that the U.S. government now requires a license for the export of the graphics processing units to China and other countries.

Dutch chipmaker ASML (ASML) also tumbled by 7.1 percent after warning of increased uncertainty around its outlook for 2025 and 2026 due to U.S. tariffs.

“While investors may have been hoping for a change, once again markets have been buffeted by ‘Storm Donald’ as the US president’s trade policy continues to exert pressure on global companies,” says AJ Bell head of financial analysis Danni Hewson.

Stocks saw further downside in afternoon trading following remarks by Federal Reserve Chair Jerome Powell even though his comments largely mirrored those he delivered earlier this month.

Powell highlighted the uncertainty surrounding Trump’s tariffs but reiterated his belief that the Fed is well positioned to wait for greater clarity before considering any adjustments to its policy stance.

Meanwhile, traders largely shrugged off a slew of U.S. economic data, including a Commerce Department report showing a sharp increase by retail sales in the month of March.

The Commerce Department said retail sales shot up by 1.4 percent in March after inching up by 0.2 percent in February. Economists had expected retail sales to jump by 1.3 percent.

The surge by retail sales partly reflected a significant rebound by sales by motor vehicles and parts dealers, which soared by 5.3 percent in March after tumbling by 1.6 percent in February.

Excluding the sharp increase in auto sales, retail sales rose by 0.5 percent in March after climbing by 0.7 percent in February. Ex-auto sales were expected to rise by 0.3 percent.

A separate report released by the Federal Reserve showing industrial production decreased by slightly more than expected in March due to a steep drop by utilities output.

The Fed said industrial production fell by 0.3 percent in March after climbing by an upwardly revised 0.8 percent in February.

Economists had expected industrial production to dip by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.

Sector News

Semiconductor stocks saw substantial weakness amid the slumps by Nvidia and ASML, resulting in a 4.1 percent nosedive by the Philadelphia Semiconductor Index.

Considerable weakness also emerged among software stocks, as reflected by the 3.1 percent plunge by the Dow Jones U.S. Software Index.

Brokerage stocks also showed a significant move to the downside, dragging the NYSE Arca Broker/Dealer Index down by 2.3 percent.

Transportation, networking and retail stocks also saw notable weakness, while gold stocks bucked the downtrend as the price of the precious metal soared to new record highs.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slumped by 1.0 percent, while Hong Kong’s Hang Seng Index tumbled by 1.9 percent.

Meanwhile, the major European markets turned mixed over the course of the session after seeing early weakness. While the French CAC 40 Index edged down by 0.1 percent, the German DAX Index and the U.K.’s FTSE 100 Index both rose by 0.3 percent.

In the bond market, treasuries moved to the upside as the day progressed after initially showing a lack of direction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.4 basis points to 4.279 percent.

Trading on Thursday may be impacted by reaction to any developments on the tariff front as well as reports on weekly jobless claims, housing starts and Philadelphia-area manufacturing activity.

On the earnings front, American Express (NYSE:AXP) Charles Schwab (SCHW) and UnitedHealth (UNH) are among the companies due to report their quarterly results before the start of trading on Thursday.

SOURCE: RTTNEWS

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