By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Financial Industry and Financial Markets
The escalating U.S.-China trade war has expanded and moved beyond tariffs, now hitting everything from chips to planes and pharma. The tensions upended the week’s fragile market stability while hitting the dollar again and spurring gold to new records.
Speaking of gold, in today’s column, I explore the rush for the precious metal this year and let you know which country has been dramatically ramping up imports.
Now onto the market news.
Today’s Market Minute
* Shares fell in Asia on Wednesday as AI darling Nvidia took a hit from U.S. curbs on chip sales to China, highlighting the damage to come in a tit-for-tat global trade war, while gold hit a record and the safe-haven currencies jumped.
* Nvidia did not warn at least some major customers in advance about new U.S. export rules it was told about a week ago requiring it to obtain licenses to sell its China-focused artificial intelligence chip, according to two sources familiar with the matter.
* China’s first-quarter economic growth outstripped expectations, underpinned by solid consumption and industrial output, but analysts fear momentum could shift sharply lower given the risk posed by U.S. tariffs.
* Prime Minister Narendra Modi’s bid to transform India into a global factory floor has produced billions of dollars of low-cost iPhones and pharmaceuticals. Now he hopes to add missiles, helicopters and battleships to the shopping carts of foreign governments.
* U.S. President Donald Trump threatened to strip Harvard of its tax-exempt status on Tuesday and said the university should apologize, a day after it rejected what it called unlawful demands to overhaul academic programs or lose federal grants.
US-China trade war goes full throttle
Investors fearful of facing endless more months of trade war-induced uncertainty were given a litany of new concerns overnight, while they also braced for a wave of retail and industrial reports and corporate earnings outlooks on Wednesday.
Shares in chip giant Nvidia plunged 6% in after hours trading on news that the firm is facing a $5.5 billion charge related to its most advanced chip available for sale in China. Washington issued new export licensing requirements for both its H20 artificial intelligence chip and AMD’s’s MI308 chip.
In addition, Trump ordered a probe into potential new tariffs on all U.S. critical minerals imports, on top of reviews into pharmaceutical and chip imports.
Emboldened by surprisingly brisk GDP growth numbers for the first quarter, Beijing is continuing to play hardball in the expanding conflict, reportedly ordering airlines to suspend deliveries of Boeing aircraft.
Hongkong Post said it had suspended goods mail services by sea to the United States and will suspend its air mail postal service for items containing goods from April 27 due to “bullying” U.S. tariffs.
And Tesla’s plans to ship components from China for Cybercab and Semi electric trucks in the United States were suspended after the U.S.-China tariff spiral potentially disrupted the electric vehicle firm’s plan to start mass production of the much-anticipated models.
Wall Street stock index futures were down again about 1% ahead of Wednesday’s bell after closing marginally in the red on Tuesday.
Gold, now up 26% for the year so far, topped $3,300 per ounce for the first time.
And the dollar suffered a relapse, with the yen and sterling hitting six-month highs.
Strengthening in the euro and Canadian dollar was likely held back by expectations of near-term policy easing.
The European Central Bank could cut interest rates again as soon as Thursday, and the Bank of Canada is on deck later today. Both meetings were preceded by soft inflation numbers that clear the way for easing.
Stocks around the world were in the red again on Wednesday, with European bourses hit by trade-related chip woes as ASML fell more than 6% following a warning that tariffs would hit its business this year. Only China’s mainland shares were higher.
Wall Street now braces for another busy day ahead with Federal Reserve Chair Jerome Powell speaking in Chicago and retail and industrial numbers for March coming out alongside another sweep of company earnings. U.S. banks were a bright spot on Tuesday as their Q1 updates showed their trading operations benefitted from market turbulence in the first three months.
Finally, check out my column today, where I explore the drivers of gold’s record run this year, including evidence of China’s rapid accumulation of the precious metal as Beijing continues reshaping its foreign reserves.
Chart of the day
China’s first quarter economic growth beat expectations, with a year-on-year GDP rise of 5.4%, matching the prior three months and topping consensus forecasts for a 5.1% expansion. The numbers likely reflect some feverish activity ahead of the U.S. tariff squeeze, with March retail and industrial numbers also beating estimates. The surge in exports last month is expected to tail off sharply in the months ahead. The country’s property downturn also remained a drag, with investment in the sector falling 9.9% year-on-year in the first three months and new home prices flat in March. GDP forecasts for the full year anticipate growth slowing to a relatively subdued 4.5%.
Today’s events to watch
* U.S. March retail sales, industrial production, February business/retail inventories, April NAB housing market index, February TIC data on foreign Treasury flows
* Federal Reserve Chair Jerome Powell speaks in Chicago; Cleveland Fed President Beth Hammack and Kansas City Fed chief Jeffrey Schmid both speak
* Bank of Canada policy decision, press conference from Governor Tiff Macklem
* World Trade Organisation releases global trade outlook 2025
* U.S. corporate earnings: US Bancorp, Citizens Financial, Travelers, CSX, Progressive, Abbott Laboratories, Prologis, Kinder Morgan etc
* U.S. Treasury sells $13 billion of 20-year bonds
* German Chancellor Olaf Scholz meets Polish Prime Minister Donald Tusk in Warsaw
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(By Mike Dolan; Editing by Lisa Shumaker)
