Chip manufacturer Nvidia announces $5.5 billion charge due to export restrictions
Chip manufacturer Nvidia stated on Tuesday that, in response to the impact of exporting H20 chips to China and other regions, the company will recognize an expense of approximately $5.5 billion this quarter. Following this news, Nvidia’s stock price fell more than 6% in after-hours trading.
Nvidia indicated in a filing that the U.S. government notified the company on April 9 that it would need to obtain a license to export these chips to China and several other countries, and this requirement will be “indefinitely” effective.
These developments seem to have shifted market sentiment negatively, with Dow futures and S&P 500 futures continuing to decline this morning. Bitcoin (BTC) experienced a slight increase before retreating, while other altcoins faced more significant declines, with Ethereum (ETH) dropping over 2% in the past 12 hours.
Upcoming events that may affect market trends include the release of U.S. retail sales data for March, scheduled for Wednesday morning Eastern Time. According to economists surveyed by Dow Jones, consumer spending is expected to grow by 1.2% in March, a significant increase compared to February’s 0.2% rise. If the data exceeds expectations, it may help alleviate concerns over an economic recession triggered by the trade war initiated by Trump. However, the market may also regard this data as a lagging indicator, as it does not reflect the sharp escalation of trade tensions that has occurred this month.
Federal Reserve Chairman Jerome Powell is scheduled to speak on Wednesday at the Economic Club of Chicago, where he will discuss his outlook on the U.S. economy. Secure Digital Markets stated in a research report on Tuesday: “All eyes are on Powell, as the market holds its breath for his remarks on Wednesday. Amid rising tensions regarding the trade war and rumors of an economic recession, traders are closely watching for any signs that the Fed may be forced to cut rates earlier than expected.”
Data sources: CNBC, CoinDesk
