S&P 500 Dips Amid Chip Stock Declines as Export Restrictions Impact Major Tech Firms
Explore how export restrictions and Federal Reserve insights on tariffs influenced the S&P 500's 2.2% drop, with semiconductor stocks falling and oil prices rebounding in the current economic landscape.
Michael Bromberg is a seasoned finance editor with over ten years of experience, specializing in simplifying complex financial concepts. He holds a Bachelor of Arts in literature from the University of Wisconsin-Madison and a master’s degree in linguistics from Universidad de Antioquia, Medellin, Colombia.
Key Highlights
- On April 16, the S&P 500 dropped 2.2% as Federal Reserve Chair Jerome Powell highlighted potential inflation and growth challenges from tariffs.
- Leading semiconductor companies Nvidia and AMD faced stock declines amid anticipated charges linked to chip export restrictions to China.
- Oil prices rebounded from prior losses, boosting stocks in the energy sector.
U.S. stock indexes experienced notable declines on Wednesday.
Federal Reserve Chair Jerome Powell addressed the Economic Club of Chicago, emphasizing that shifts in U.S. trade policies could hinder economic growth and elevate inflation risks. Observing decreased business and consumer confidence, Powell indicated the Fed will monitor tariff impacts closely before adjusting interest rates.
The S&P 500 closed 2.2% lower, the Dow Jones Industrial Average fell 1.7%, and the Nasdaq Composite was down 3.1%, weighed down by technology sector struggles.
J.B. Hunt Transport Services (JBHT) shares plunged 7.7%, the largest drop in the S&P 500, following its earnings report. Despite surpassing sales and profit expectations for Q1, executives highlighted tariff-related demand pressures as customers reassess supply chain impacts. The company is exploring cost-reduction strategies amid these challenges.
Omnicom Group (OMC) reaffirmed its commitment to acquiring Interpublic Group (IPG), countering concerns about client attrition. Nonetheless, both companies’ shares fell over 7% on the day.
Semiconductor stocks declined sharply after Nvidia (NVDA) and Advanced Micro Devices (AMD) disclosed expected significant charges due to export restrictions imposed by previous U.S. administration policies. Nvidia anticipates a $5.5 billion impact in its fiscal Q1 results, while AMD projects up to $800 million in charges. Export licenses will now be required for key chips such as Nvidia's H20 and AMD's MI308 to be sold to Chinese firms. Consequently, AMD shares dropped 7.4% and Nvidia shares fell 6.9%.
Palantir Technologies (PLTR) saw a 5.8% decrease in shares, reversing earlier weekly gains after securing a contract with NATO for deploying its AI military systems. Other enterprise software stocks also declined amid broad tech sector pressures following Powell’s tariff-related remarks.
Crude oil futures climbed after the U.S. imposed sanctions on Chinese oil importers of Iranian crude, raising supply concerns. Despite recent global economic uncertainties pressuring oil prices, this rebound supported gains in oil and gas stocks. APA Corp. (APA) led S&P 500 gains with a 3.2% increase.
Abbott Laboratories (ABT) shares rose 2.8% after reporting better-than-expected Q1 sales and profits. The company reaffirmed its full-year earnings guidance and announced a $500 million investment in two new manufacturing and R&D facilities in Texas and Illinois, scheduled to open this year.
Gold prices surged to new record highs, reflecting its continued appeal as a safe-haven asset amid geopolitical tensions. Newmont Corporation (NEM), the world’s largest gold producer, saw shares increase by 2.6%.
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