Key Points
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The stock market is down once more as some items from China are tariffed at 245%.
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Chip stocks are tumbling due to NVIDIA reporting a $5.5 billion charge due to tariffs.
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Volatility has spiked up once more.
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This week was relatively calm due to a lack of new tariffs being imposed and the trade war between the U.S. and China cooling down. The Chinese embassy in the U.S. did say that China would ignore new tariffs as China’s existing 125% tariffs on U.S. goods already made it difficult for American products to compete in the Chinese market.
However, the U.S. could still retaliate against China with higher tariffs, which would cause more pain for domestic consumers. New reports have caused more fears in the market. Not only that, existing tariffs have already caused semiconductor stocks to tumble as NVIDIA (NASDAQ: NVDA) sees a $5.5 billion charge due to tariffs. As a result, the stock market is tumbling this morning.
Here’s a market update as of 10:45 A.M (ET) today.
- The S&P 500 is down 55 points, or 1%.
- The Nasdaq Composite is down 295.1 points, or 1.75%.
- The Dow Jones Industrial Average is down 144.2 points, or 0.36%.
Tariffs Spook Tech Sector Again
And unlike previous tariff-related hits to the stock market, this time, it’s more direct. As mentioned in the intro, NVIDIA expects to take a $5.5 billion hit from tariffs. The Trump administration mandated an export license for the H20 and effectively halted shipments due to Chinese semiconductor development. This charge covers inventory write-downs and canceled orders. If the policy is unchanged, analysts see over $10 billion in lost sales over the next year.
Plus, headlines have cited a 245% tariff rate on certain items like medical supplies and batteries. This is not a blanket tariff, but this max tariff rate dominating headlines has caused more fears since the administration started to get more dovish on tariffs.
The Federal Reserve’s Hammack and Powell are expected to speak later today, and that could cause more swings in the market depending on how they see the economy.
Macros
- U.S. Core Retail Sales came in at 0.5% month-over-month vs. the 0.4% forecast.
- U.S. Industrial Production came in at 1.34% year-over-year, down from 1.44%.
- U.S. Retail Sales came in at 4.6% year-over-year, and this is up from 3.11%.
- U.S. Retail Sales came in at 1.4% month-over-month and met forecasts.
Other Assets
Bitcoin has surprisingly held steady despite other high-risk stocks being offloaded. Gold has gained considerably since investors are once again dumping risky assets like semiconductor stocks and are hedging against the volatility.
- Gold is up 2.7%.
- Crude Oil Futures are up 2%.
- Natural Gas Futures are down 0.8%.
- Bitcoin is up 0.9% to $84,873.
The image featured at the top of this post is ©samxmeg / E+ via Getty Images.