Securities plummet
Global stocks fell sharply on Wednesday as US restrictions on chip sales to China and uncertainty about tariffs continued to affect technology stocks.
Meanwhile, gold prices hit a record high and the USD weakened.
Washington has issued new export licensing requests for the sale of Nvidia's H20 AI chips (NVDA.O) and AMD's MI308 chips (AMD.O) to China.
Nvidia said the move would cost the company $5.5 billion and reduce its stock to 8%.
"The market is still stuck between information about new tariffs and negotiations or tariff suspensions," Paul Christopher, a strategist at Wells Fargo Investment Institute, wrote in a note on Wednesday.
The Dow Jones index fell 1.8%, the S&P 500 fell 2.5% and Nasdaq composite fell 3.6%.
US economic growth seems to be slowing down, Federal Reserve Chairman Jerome Powell said, noting that consumer spending is growing moderately and imports are skyrocketing to avoid tariffs, which could affect GDP estimates.
Wednesday data showed that US retail sales increased sharply in March as households increased their car purchases before the tariffs were imposed, although concerns about economic prospects are affecting unnecessary spending.
President Donald Trump has issued an inquiry into the possibility of a new tax on all important mineral imports, in addition to assessments of pharmaceutical and chip imports. Beijing continues to take strong action, requiring airlines to stop receiving deliveries of Boeing (BA.N) aircraft.
The sell-off of Asian stocks accelerated in the afternoon. MSCI index of Asia-Pacific stocks outside of Japan decreased by 0.8%, ending a streak of increase for 4 consecutive days.
Chinese stock indexes increased by 0.3%, while investors also assessed positive GDP data before the tariff increased in April, but Hong Kong's Hang Seng index (China) decreased by 1.9%.
"The big focus is still tariffs," said Aneeka Gupta, an economist and strategist at WisdomTree.
"In China, the restrictions have raised concerns that access to global technology hardware will be further limited. This is also leading to a risk-off sentiment in the market," said Gupta.
The White House said Trump was ready to reach a trade deal with China, but Beijing must be the proactive side.
The World Trade Organization has cut its forecast for global commodity trade sharply, from strong growth to decline on Wednesday, saying that new US tariffs and side effects could lead to the strongest decline since the COVID-19 pandemic.
Gold price shines
Uncertainty makes gold an attractive choice, with gold prices reaching a record high of $3,331/ounce, up 3.2%.
Australian bank ANZ on Wednesday updated its forecast for gold prices to reach $3,600/ounce by the end of the year.
The USD index, which tracks the value of the US dollar against six major currencies, fell 0.7% to its lowest level since April 2022, showed investors remain cautious about US assets.
The Japanese Yen and the Swiss French, safe-haven assets during market fluctuations, increased by 0.6% and 1%, respectively.
The Yen is trading at its highest level since September, while the French frank is at its highest level in 10 years.
Bank of Japan Governor Kazuo Ueda said the central bank may need to take policy measures if US tariffs affect the Japanese economy, signaling the bank's interest rate hike cycle.
Investors are turning to European government bonds as stocks fall, but away from US government bonds.
10-year yields fell 3.8 basis points to 4.285%, after yields rose sharply last week due to concerns about the stability of the US economy.
Short-term interest rate futures traders are betting that the Fed will continue to cut interest rates in June and that by the end of the year, the policy rate, currently at 4.25%-4.50%, will decrease by one percentage point.
Oil prices rose about 1.8% on Wednesday, reversing early-day losses as the market viewed China's bullish stance in trade talks with the US, although increases were limited by concerns that a trade war would reduce energy demand.
