U.S. stock markets, which have been rocked by Donald Trump’s unpredictable trade policies for weeks, were once again under pressure on Wednesday as the repercussions of his global trade war spread across multiple industries simultaneously.
Tech equities were particularly severely hit when bellwethers like Nvidia, which are closely linked to the global supply chain, warned of negative effects on their bottom line. equities declined generally.
The head of the Federal Reserve noted slowing economic growth, but he also raised concerns about the threat that tariffs pose to the Fed’s objective of decreasing inflation. Meanwhile, airlines announced that they are preparing for an unpredictable summer travel season.
And though Trump has said numerous countries are lining up to make deals with the United States, the progress has been slow and uncertain. The president was set to engage personally in talks with Japan over tariffs later on Wednesday.
While the market volatility that erupted two weeks ago has ebbed, business leaders still say the uncertainty is stalling spending plans. The world’s two largest economies – the United States and China – remain in a full-blown trade war, and the status of U.S. talks with the European Union, Canada and other countries is unclear.
“What was true yesterday is no longer true today, what will be tomorrow I do not know,” said Jean-Christophe Babin, CEO of Rome-based Bulgari, the jewelry subsidiary of luxury giant LVMH, regarding U.S. tariff policy.
TECH SELL OFF
The ructions on Wednesday were led by tech companies. While ASML, the largest supplier of computer chip-making equipment worldwide, stated that tariffs had left the prognosis for 2025 and 2026 unclear, Nvidia, a giant in AI chips, claimed that its sales to China would cost it $5.5 billion in accounting charges as a result of the administration’s restrictions on AI chip exports. Last week, industry representatives told legislators that the tariffs might cost other U.S. chip equipment manufacturers roughly $1 billion annually.
The tech-dominated Nasdaq Composite fell 3% on Wednesday, with a 7% decline in Nvidia leading the overall stock market decline. Advanced Micro Devices, another chipmaker, stated that the administration’s restrictions on shipments to China will cost it $800 million.
Even more upbeat businesses moderated their optimism. Unusually, United Airlines presented two scenarios for 2025 while maintaining its profit estimate, stating that the macroenvironment was “impossible to predict this year with any degree of confidence.”
On Wednesday night, scheduled talks between U.S. Treasury Secretary Scott Bessent and Ryosei Akazawa, the minister of economic revitalization, turned into a meeting with Trump himself, putting Japan, the country now leading the line in talks, in a difficult situation. As he continues to concentrate on the U.S. trade balance with other nations, the president of the United States stated that he will personally attend the talks to tackle other non-trade matters.
Each year, Japan exports over a million automobiles to the United States, including reasonably priced models that might see price increases of hundreds of dollars if tariffs remain in effect. Although it is not a simple undertaking, some manufacturers have considered shifting some of their production to the United States.
Christian Meunier, the chairman of Nissan Americas, told Reuters that the process takes years and that “we need to have somewhat of a break on the tariffs for a period of time so that we can organize ourselves to localize…and bring the supplier base in the US.”
SCRAMBLING TO GET THINGS IN
In a speech in Chicago, Fed Chair Jerome Powell acknowledged the economy’s slowdown but warned that “inflation is likely to go up as tariffs find their way and some part of those tariffs come to be paid by the public.”
Since Trump intensified his tariff rhetoric in mid-February, U.S. consumer sentiment has drastically declined.
In recent days, banking CEOs have stated that while consumer spending has not decreased significantly, cracks are beginning to show. Due in large part to March being the best month for auto sales since 2023, retail sales were strong. However, other spending components were weaker, and service-sector expenditure may begin to decline as consumers stockpile items out of fear of price increases.
Chinese discount stores Temu and Shein urged customers to purchase “now at today’s rates,” stating in nearly identical emails that they would be boosting prices starting on April 25. This indicates that retailers are also aware of this potential.
It might also be more difficult to spend money on equipment and items coming into and going out of the US.
L.B. White, a sales manager for the company that manufactures hog barn equipment in the United States and sells it in Canada, said, “Everyone was scrambling through the month of March to try to get things in.”
