Asian markets dropped Wednesday as Nvidia shares plunged following U.S. restrictions on AI chip exports to China, fueling fears of an expanding U.S.-China tech war. The news wiped out $160 billion from Nvidia’s market cap, triggering a 1.4% fall in Nasdaq futures and a 0.8% drop in S&P 500 futures.
The U.S. imposed new export licensing rules on Nvidia’s H20 chips, a move expected to cost the chipmaker $5.5 billion. Analysts warn the export curbs mark the beginning of a larger tech battle, prompting investor caution. The broader MSCI Asia-Pacific index slipped 0.9%, while Japan’s Nikkei dipped 0.5%, and Hong Kong’s Hang Seng dropped 1.6%. In contrast, Chinese chipmakers like Hua Hong Semiconductor and SMIC gained on expectations of domestic growth.
Despite China’s Q1 GDP growth beating forecasts at 5.4%, trade tensions cloud the outlook. President Trump’s order to investigate new tariffs on critical mineral imports and China’s retaliation—including a halt on Boeing aircraft deliveries—intensified concerns over global supply chains.
Gold soared 1.2% to a record $3,266.65 per ounce, driven by rising geopolitical risk. ANZ raised its year-end gold price forecast to $3,600, citing increased demand for safe-haven assets. U.S. Treasury yields stabilized, with the 10-year at 4.325% and the 30-year at 4.777%, both below last week’s highs.
In currency markets, the dollar weakened. The euro rose to $1.1316, and the yen gained to 142.84 per dollar. Bank of Japan Governor Ueda signaled potential policy action if tariffs weigh on Japan’s economy.
Oil prices edged higher, with Brent at $64.79 and U.S. crude at $61.42. Markets now await Federal Reserve Chair Jerome Powell’s speech for further guidance amid escalating trade tensions.
