United States stock market futures were sharply lower on April 16, 2025, as rising trade tensions with China, a surprise chip sale ban on Nvidia, and weak sentiment ahead of Fed Chair Jerome Powell’s remarks roiled global investor confidence.

US Futures Slide Across the Board

• S&P 500 futures were down 1.3%

• Nasdaq 100 futures dropped 2.1%

• Dow Jones Industrial Average futures were lower by 280 points

The decline comes after rising fears around US-China trade friction, and a heavy blow to one of Wall Street’s most influential companies — Nvidia.

Nvidia Sinks After Chip Ban and Revenue Hit

Nvidia shares plunged over 6% in premarket trading after the tech giant disclosed that the US government blocked sales of its AI chips to China without a license.

This sudden restriction is expected to have a major financial impact, with Nvidia warning of a $5.5 billion revenue hit this quarter.

The chips in question — used in artificial intelligence, data centres, and high-performance computing — are considered strategic assets. The US government's move is part of its broader attempt to curb China's AI and military capabilities, but it has brought collateral damage to domestic chipmakers.

Nvidia's setback sent ripples across the broader semiconductor and technology space. Other chip stocks like AMD, Micron, and Broadcom also saw declines in extended trading hours.

Trade Tensions Escalate

The chip sale ban follows a week of rising US-China tension, including a new probe ordered by President Donald Trump into critical mineral imports. The fresh scrutiny raises the spectre of tariffs and countermeasures, reviving fears of a full-blown trade war.

Markets are now pricing in weaker corporate earnings, disrupted supply chains, and slower global growth, particularly in sectors like semiconductors, electric vehicles, rare earth metals, and telecom.

Focus Shifts to Powell's Speech and Key Data

Investors are also preparing for Federal Reserve Chair Jerome Powell’s speech at the Economic Club of Chicago later today. Powell’s tone will be scrutinised for clues on:

• The rate-cut timeline

• The Fed's inflation outlook

• The possibility of policy easing amid financial volatility

On the macro front, markets await:

• US retail sales data for March

• Industrial production figures

• Any update on consumer spending patterns

Stronger-than-expected figures may temporarily ease growth concerns, but could complicate the Fed’s rate path if inflation surprises on the upside.

Earnings in Focus: Abbott and Travelers

Apart from macro and geopolitical worries, traders are closely watching the Q1 earnings season, which is gaining momentum.

• Abbott Laboratories will report today, with investors eyeing recovery in medical devices and nutritional product segments.

• Travelers, the major insurance firm, will report its numbers amid rising climate-related claims and market volatility. The sector is under pressure from natural catastrophe risks and property damage trends in high-risk zones.

Early earnings results from financials and tech have been mixed, with revenue growth often offset by margin pressures and higher costs.

Global Market Impact

The Nvidia news, combined with US futures falling, has had a cascading effect on global markets:

• Asian markets closed lower, with the Hang Seng and Nikkei both down over 1%

• European indices opened in the red, with the DAX and CAC under pressure from export-related fears

• US dollar and Treasury yields rose as investors moved toward safe-haven assets

What to Watch Next

1. Fed Chair Jerome Powell’s speech — a potential catalyst for sentiment shift

2. Nvidia’s stock response post-market open — could drive tech sector direction

3. US-China policy reactions — any counter-response from China may add volatility

4. Retail sales and industrial output data — crucial to understand consumer health

5. Corporate earnings — broader guidance trends will reveal the Q2 outlook

Conclusion

The US market is facing a rare confluence of tech-specific risks, geopolitical shocks, and macro uncertainty. Nvidia’s 6% drop and the sharp fall in US futures reflect deep concerns about supply chain restrictions, earnings headwinds, and rising regulatory unpredictability.

With Powell's address and earnings data ahead, markets are likely to remain volatile through the week. Investors should brace for swings, especially in tech-heavy and trade-sensitive sectors.

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