📆 Wednesday, April 16
► European markets are trading lower as chip sector concerns and fresh tariff volatility hit investor sentiment. The Stoxx 600 trades 0.75% lower, led lower by technology shares. ASML dropped over 5% after posting Q1 revenue of €7.74B, which missed estimates by €40M, despite a 46.3% Y/Y increase. Bookings came in at €3.94B, well below analyst expectations of €4.82B, and the company cited growing uncertainty due to U.S. tariff policies. Still, ASML maintained its full-year outlook, projecting total 2025 net sales between €30B and €35B. Inflation in the Eurozone eased to 2.2% in March, down from 2.3% in February, while UK inflation surprised to the downside, falling to 2.6%, below the 2.7% consensus and down from 2.8% previously. That sparked a rally in UK bonds and reinforced bets on a potential rate cut by the Bank of England.
► In the U.S., tech shares led a retreat, with Nasdaq 100 futures dropping over 1.3%, driven by a sharp selloff in Nvidia, which fell 6% pre-market. The S&P 500 futures were also lower, down 0.7%. Pressure mounted after export curbs on Nvidia’s H20 AI chips to China were reinstated, a significant and yet another reversal from the recent temporary license exemptions. The U.S. government now requires special licenses to ship the high-end chips, citing national security concerns over China's use of AI in military and surveillance technology. Nvidia faces a potential $5.5 billion charge in Q1 linked to inventory write-downs and purchase commitments for chips impacted by the curbs. The move threatens to cut off a crucial growth market for the Nvidia (and other chip companies) and could have knock-on effects for the broader AI chip supply chain. Market focus now turns to Fed Chair Powell’s remarks later today, as well as March retail sales data, which will provide clues about U.S. consumer resilience amid the tariff storm.
► Asian markets saw broad declines, led by sharp losses in Hong Kong and Japan. The Hang Seng dropped 1.91%, as tech names sold off following the reinstated export restriction for Nvidia's high-end chips that came as a negative surprise. The Nikkei 225 shed 1.03%, driven by weakness in chip stocks and lingering concerns over U.S.-Japan trade talks scheduled this week. China’s markets were more mixed: the Shanghai Composite rose 0.26%, supported by stronger-than-expected Q1 GDP growth of 5.4% YoY, while the China A50 gained 0.48%. The Shenzhen Component fell 0.85%, showing regional fragmentation. The Australian ASX 200 remained stable (-0.04%).
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