Wednesday Afternoon Coffee - Markets Update - 16 Apr 2025 - Tech Stocks Slide on U.S. Chip Curbs; Gold Soars to Record High

Markets Update: U.S. and global stock markets fell sharply on Wednesday due to new export restrictions on chip sales to China, which negatively impacted technology stocks and revived concerns about rising trade tensions. Meanwhile, gold reached a new record high as investors looked for safe havens, the dollar weakened, and oil prices bounced back.

Global Markets Roundup: 16 Apr 2025

Tech Hit by Fresh Chip Export Controls

The Nasdaq Composite led Wall Street losses with a 2.1% decline, weighed down by a 7% plunge in Nvidia shares. The S&P 500 shed 1.2% and the Dow Jones Industrial Average slipped 0.5%.

The sharp moves followed the Biden administration's new licensing requirements for sales of Nvidia’s H20 and AMD’s MI308 artificial intelligence chips to China. Nvidia warned the measures could cost the company $5.5 billion in lost revenue.

Retail data released Wednesday showed U.S. sales jumped in March, boosted by a surge in vehicle purchases ahead of expected tariffs. However, analysts warned the increase may be temporary.

Global Stocks Fall as Trade Tensions Resurface

European and Asian markets joined the selloff. Europe’s STOXX 600 index dipped 0.2%, while the MSCI Asia-Pacific index fell 0.8%, snapping a four-day rally. In China, blue-chip shares rose 0.3% on stronger-than-expected GDP data that predated April’s tariff escalations. However, Hong Kong’s Hang Seng index slumped 1.9%.

In Tokyo, Bank of Japan Governor Kazuo Ueda warned that escalating U.S. tariffs could prompt a pause in the central bank’s tightening cycle if Japan’s economy suffers spillover damage.

Meanwhile, the White House said President Trump is open to a trade agreement with China, but Beijing must take the first step. The WTO slashed its global trade growth forecast, now projecting a contraction that could rival the COVID-era slump if tensions worsen.

Gold Soars, Dollar Slumps

Gold extended its rally, surging 3% to a new record of $3,327 per ounce, driven by a flight to safety. Analysts at ANZ Bank raised their year-end forecast for gold to $3,600, citing strong safe-haven demand.

The U.S. Dollar Index DXY slid 0.7% to near its lowest since April 2022. The Japanese yen USDJPY and Swiss franc both strengthened—up 0.5% and 1%, respectively—as investors sought refuge from volatility. The franc reached a 10-year high, while the yen traded near its strongest level since September.

Bond Yields Steady, Fed Policy Eyed

U.S. 10-year Treasury yields edged down to 4.312%, ahead of a highly anticipated speech from Fed Chair Jerome Powell. Traders are watching closely for signs that the Fed may lean dovish, following recent comments from Governor Christopher Waller suggesting tariff shocks could warrant rate cuts. While Treasuries held steady, investors favored European government bonds amid the equity market decline.

Oil Climbs on Trade Optimism

Oil prices reversed early losses and rose around 1.7% as markets digested China’s openness to potential trade talks. West Texas Intermediate crude gained $0.94 to $62.27/barrel, while Brent added $0.97 to $65.64/barrel.

Commodities Mixed

Grains and soft commodities posted modest gains:

Soybeans (ZS1!): +1¼¢ to $10.37¼/bushel
Corn (ZC1!): +1¢ to $4.90¼/bushel
Wheat (ZW1!): +3¢ to $5.59/bushel
Cotton: Up 27 to 72 points midday
Cocoa: Prices not updated after recent declines

Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team