United States benchmark averages closed lower on Wednesday (Thursday AEST) as concerns over the tech sector and ongoing trade tensions rattled investors.
The Dow Jones Industrial Average fell 699.6 points, or 1.7%, to close at 39,669.4. The S&P 500 dropped 2.2% to finish at 5,275.7, while the tech-heavy Nasdaq Composite dipped 3.1% to end the session at 16,307.2.
Nvidia shares fell 6.9% after the company disclosed a US$5.5 billion quarterly charge linked to restrictions on exports of its H20 graphics processing units to China and other countries.
In a regulatory filing, Nvidia said the U.S. government had mandated licenses for shipping these chips overseas.
The sell-off intensified following a report from The New York Times that the Trump administration is taking measures to clamp down on Chinese AI startup DeepSeek, a company that uses Nvidia’s chips.
The news weighed on other semiconductor stocks. AMD declined 7.4% and Micron Technology slid 2.4%.
ASML also contributed to the sector's woes after a disappointing earnings report, with its U.S.-listed shares losing 7%.
Markets faced additional pressure after Federal Reserve Chair Jerome Powell raised concerns about the inflationary impact of tariffs proposed by former President Donald Trump.
During a Q&A at the Economic Club of Chicago, Powell warned that such levies could make the Fed’s job more difficult.
“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”
He added that tariffs could lift inflation in the near term and were “likely to move us further away from our goals”.
In the bond markets, the 10-year Treasury yield dropped 1.3% to 4.281%, while the 2-year yield declined 2% to 3.776%.
