^{Source: CNN}

Market Outlook Dampens as Nvidia Shares Sink Over China Export Hit

U.S. stock futures took a sharp dive early Wednesday morning, as investors reacted to a surprise announcement from Nvidia and turned their attention to upcoming retail sales data and a packed earnings slate.

• Dow Jones Industrial Average futures dropped by 328 points, or 0.8%
• S&P 500 futures fell 1.49%
• Nasdaq 100 futures plunged 2.29%

The losses followed a relatively uneventful Tuesday session that ended with modest declines across the board. The Dow closed down 156 points (-0.4%), the S&P 500 lost 0.2%, and the Nasdaq Composite ended marginally lower.

Nvidia Warns of $5.5 Billion Charge: Here's Why Investors Are Nervous

Tech giant Nvidia (NVDA) sent shockwaves through after-hours trading after revealing it expects to take a $5.5 billion charge in the upcoming quarter. The hit stems from issues surrounding the export of its H20 graphics processing units (GPUs) to China and other countries, due to U.S. export restrictions on advanced AI chips.

Nvidia stock plunged over 6% in extended trading, pressuring the broader tech-heavy Nasdaq index. This comes as Nvidia has been one of the key drivers behind this year's AI-fueled stock rally, making the drop particularly unsettling for growth investors.

According to Bloomberg, Nvidia had anticipated strong demand in China for its new H20 chips, designed to meet U.S. export restrictions. However, shifting policies and tightening controls led to logistical and revenue setbacks.

Tariffs and Tensions: A Broader Market Under Pressure

The broader markets remain volatile as geopolitical tensions — particularly between the U.S. and China — continue to simmer. The recent announcement of “reciprocal tariffs” by the Trump administration on April 2 reignited trade war fears.

Since that announcement:

• The Dow and Nasdaq have each dropped about 4.4%
• The S&P 500 has declined 4.8%

Economic analysts warn that these issues could continue to weigh on market sentiment. Mohamed El-Erian, chief economic advisor at Allianz, noted on CNBC’s Closing Bell: Overtime that investors should not be lulled into complacency by brief periods of calm.

“Fundamentally, things have not been resolved,” El-Erian said. “The tug-of-war between China and the U.S., as well as between the Fed and the administration, is far from over. Volatility is not going away.”

Retail Sales in Focus: Will Consumers Keep Spending?

A crucial data point lands Wednesday morning: the March retail sales report. Analysts polled by Dow Jones expect retail sales to have grown 1.2% month-over-month, a notable jump from February’s 0.2% increase.

Why this matters:

• Retail spending drives over two-thirds of U.S. GDP
• Signs of strong consumer demand could impact Fed policy on interest rates
• Persistent inflation concerns remain a key risk

Economists will also be monitoring industrial and manufacturing production data, providing a more comprehensive picture of the economy’s health.

Earnings on Deck: Financial and Tech Giants Report

Wednesday also marks a heavy day for Q1 earnings reports. Companies expected to announce results include:

• Travelers (TRV)
• U.S. Bancorp (USB)
• Abbott Laboratories (ABT)
• ASML Holding (ASML)
• Citizens Financial Group (CFG)

Investors are eager to assess how corporate America is coping with higher borrowing costs, geopolitical uncertainty, and persistent inflation.

According to FactSet, S&P 500 companies are projected to post a modest 3.2% increase in earnings year-over-year for Q1, with sectors like tech and health care expected to outperform.

Final Take: Uncertainty Clouds the Market's Path

With Nvidia’s stumble, trade tensions reigniting, and crucial economic data looming, Wall Street is bracing for another volatile session. While strong retail sales could reassure some investors, a disappointing report might deepen concerns that the U.S. economy is losing steam.

As volatility returns, analysts recommend investors stay cautious, diversify holdings, and watch for signals from both the Fed and global economic indicators.

Stay tuned for live updates as data and earnings roll in.

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