U.S. equity futures moved firmly lower in early Wednesday trading, with the dollar slumping to a fresh three-year trough amid the latest trade war salvo in the tech sector and further flight-to-safety trades that suggest more market uncertainty over the coming weeks.
Tech stocks are leading this morning’s decline, with Nvidia (NVDA)  shares down more than 5.7% in premarket trading after the Trump administration unveiled new restrictions on the sale of its H20 AI chip to customers in China.Â
The Commerce Department also placed similar licensing requirements on the MI308 chip made by rival Advanced Micro Devices (AMD)  in a move that will hammer China sales and take the current trade dispute between Washington and Beijing to another, more damaging level.
“This is just the beginning of what is going to be a long and drawn out process between the US and China with 145% reciprocal tariffs now in place (ex tech until the Section 232 hits) and the Street/market now waiting for any signs or tea leaves of some negotiations to kick off,” said Wedbush analyst Dan Ives.Â
China, in fact, appointed a new trade negotiator and, according to Bloomberg News, is willing to re-engage with the U.S. if President Trump and his cabinet show more “respect” to leaders in Beijing.Â
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The trade war fallout, however, is starting to ripple through into some early first quarter earnings reports, with ASMLÂ (ASML) , the Netherlands-based maker of chip circuitry engravers that play a crucial role in semiconductor production, missing second quarter revenues forecasts and warning that tariffs will blunt near-term demand.Â
The President is also looking to expand his tariff strategy into the critical minerals spaces, and is currently planning schedules for both the pharmaceutical and semiconductor sectors as well.Â
The breadth of his tariff structure, however, and the confusing on-again/off-again nature of their start dates and exemptions, continues to unsettle business leaders and longer-term investors.
Related: Have stocks reached their tariff selloff bottom? Investors just aren’t sure.
Gold prices hit a fresh all-time high of $3,318 per ounce in overnight trading, while safe-haven Treasury bonds rallied, pulling 10-year note yields 2 basis points lower to 4.341% ahead of a speech from Federal Reserve Chairman Jerome Powell later this afternoon.Â
The U.S. dollar index, however, continued its recent slump, falling another 0.71% in overnight trading to 99.498, the lowest since April of 2022.
On Wall Street, tech stocks are set to lead the three major indices lower, with futures contracts tied to the Nasdaq priced for an opening bell decline of around 245 points.
The S&P 500, the broadest measure of U.S. shares, is priced for a 34 point decline ahead of the Commerce Department’s March reading of retail sales while the Dow Jones Industrial Average is called 30 points lower.Â
In overseas markets, Europe’s Stoxx 600 benchmark fell 0.89% in mid-day Frankfurt trading, with ASML down 7% and leading tech stocks lower. Britain’s FTSE 100, meanwhile, was down 0.46% in London.
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Overnight in Asia, a stronger-than-expected reading of first quarter GDP in China, which showed a 5.4% expansion over the three months ending in March, failed to offset trade war concerns as domestic stocks fell and the regional MSCI ex-Japan index ended 0.96% lower on the session.
Japan’s Nikkei 225 closed 1.01% as the yen rose to 142.84 against the U.S. dollar, and tech stocks fell sharply following new of export restrictions for Nvidia and AMD.Â
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