NEW YORK (Reuters) – U.S. stocks ended sharply lower on Wednesday as Nvidia warned about steep charges from new U.S. curbs on its chip exports to China and as Federal Reserve Chair Jerome Powell said U.S. economic growth appears to be slowing.
Powell, in remarks for the Economic Club of Chicago, said larger-than-expected tariffs likely mean higher inflation and slower growth. But he noted that the U.S. economy is still in a solid position, and that the Fed is waiting for greater clarity before considering policy changes.
Stocks added to declines from earlier in the day after Powell’s comments, with Nvidia and other chipmaker stocks among the biggest decliners.
“Powell is confirming what investors have been worried about, and that is the likelihood of slowing economic growth and more stubborn inflation as a result of the tariffs,” said Sam Stovall, chief investment strategist at CFRA Research.
An index of semiconductor stocks was down sharply.
Nvidia said late on Tuesday it would take $5.5 billion in charges after the U.S. government limited exports of its H20 artificial-intelligence chip to China, a key market for one of its most popular chips.
According to preliminary data, the S&P 500 lost 120.84 points, or 2.24%, to end at 5,275.79 points, while the Nasdaq Composite lost 513.57 points, or 3.05%, to 16,309.60. The Dow Jones Industrial Average fell 695.17 points, or 1.72%, to 39,673.79.
The U.S. and China have been going back and forth in a tariff battle in recent weeks.
Also on Wednesday, Dutch chip-making tools giant ASML warned that the tariffs had led to increased uncertainty about its outlook.
(Reporting by Caroline Valetkevitch in New YorkAdditional reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru and Carolina Mandl in New YorkEditing by Pooja Desai and Matthew Lewis)
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