London (AFP) – Wall Street shares fell but European stocks diverged Wednesday after the US government imposed restrictions on exports of a key Nvidia chip to China, the latest trade war salvo between the world’s biggest economies. After a relatively peaceful couple of days on markets following tariff-related volatility last week, investors were once again on the defensive, sending gold, a safe-haven asset in times of uncertainty, above $3,300 an ounce for the first time.
Wall Street’s main indexes were down in late morning deals, with Nvidia shares tanking by more than six percent and the dollar under pressure again. Nvidia notified regulators late Tuesday that it expects a $5.5 billion hit this quarter owing to a new US licensing requirement on the chip it can legally sell in China. The company at the heart of helping to power artificial intelligence said it must obtain licenses to export its H20 chips to the Asian country because of concerns they would be used in supercomputers there.
“It’s another stark reminder that geopolitics and technology remain deeply entangled — and that markets will continue to dance to Washington’s tune, whether they like it or not,” said Fawad Razaqzada, market analyst at City Index and Forex.com. The United States on Monday opened the door to tariffs targeting semiconductors and chip-making equipment, with Trump saying on Sunday an announcement would be made “over the next week.” Trump has also kicked off an investigation that could see tariffs imposed on critical minerals such as rare earths, which are used in a wide range of products including smartphones, wind turbines, and electric vehicle motors.
It is the latest front in Trump’s erratic trade war, which has seen the US leader impose a universal 10-percent duty, pause higher levies on some countries, and temporarily exempt some sectors from duties. “Markets continue to suffer from the White House’s tariff flip-flopping,” Razaqzada said. “The stop-start nature of US trade policy this month has made long-term positioning something of a fool’s errand, with volatility dominating the landscape.”
In Europe, London’s benchmark FTSE 100 stock index closed 0.3 percent higher, as official data showed UK inflation slowed more than expected in March. Frankfurt also finished 0.3 percent in the green but Paris fell almost 0.1 percent. Shares in Dutch tech giant ASML, which makes machines that produce semiconductors, fell more than five percent as its net bookings came in below expectations. ASML’s disappointing earnings report “has only added to the sector-wide tech concerns,” said David Morrison, analyst at Trade Nation.
The dollar slid once more against main rivals. Yields on 10-year Treasury bills eased but remain high following a selloff last week that raised doubts about the haven status of US bonds. Gold hit a record $3,317.75 an ounce before paring back gains. Oil prices rose almost two percent after recent sharp falls on fears that the tariffs will dampen global economic growth.
– Key figures at 1540 GMT –
New York – Dow: DOWN 0.1 percent at 40,332.34 points
New York – S&P 500: DOWN 0.7 percent at 5,356.74
New York – Nasdaq: DOWN 1.6 percent at 16,556.19
London – FTSE 100: UP 0.3 percent at 8,275.60 (close)
Paris – CAC 40: DOWN 0.1 percent at 7,329.97 (close)
Frankfurt – DAX: UP 0.3 percent at 21,311.02 (close)
Tokyo – Nikkei 225: DOWN 1.0 percent at 33,920.40 (close)
Hong Kong – Hang Seng Index: DOWN 1.9 percent at 21,056.98 (close)
Shanghai – Composite: UP 0.3 percent at 3,276.00 (close)
Euro/dollar: UP at $1.1370 from $1.1291 on Tuesday
Pound/dollar: UP at $1.3235 from $1.3232
Dollar/yen: DOWN at 142.65 yen from 143.18 yen
Euro/pound: UP at 85.90 pence from 85.30 pence
Brent North Sea Crude: UP 1.9 percent at $65.92 per barrel
West Texas Intermediate: UP 1.9 percent at $61.91 per barrel
© 2024 AFP
