Market Meltdown: Nvidia's $5.5B Hit and Powell's Tariff Warnings Shake Wall Street

Wall Street took a nosedive on Wednesday, with investors freaking out over Nvidia's bombshell $5.5 billion charge linked to China and Fed Chair Powell's ominous warnings about tariffs jacking up inflation and slamming the brakes on growth.

The stock market was rocked to its core as traders grappled with the U.S. tightening the screws on chip exports to China and Powell sounding the alarm on the economic fallout from Trump's tariff tantrums.

The S&P 500 tanked by about 2.2%, the Dow Jones Industrial Average cratered 1.7%, and the Nasdaq Composite plummeted around 3%, flirting with bear market territory. Tech stocks led the brutal sell-off.

Nvidia shares got absolutely hammered, dropping nearly 10% after the company dropped the bombshell that it would take a massive $5.5 billion hit thanks to new U.S. export restrictions. These rules are messing with its H20 graphics processors, a big deal in the Chinese market.

Other chipmakers weren't spared either, with AMD taking an 8% hit, Micron falling 3%, and ASML shares sliding over 7% after a disappointing earnings report.

Amidst the chaos, Bitcoin (BTC) held steady around the $84,000 mark, showing some serious resilience.

Powell's inflation concerns

In a no-holds-barred speech to the Economic Club of Chicago, Powell dropped a truth bomb, saying the Fed would hold off on rate hikes until they got a clearer picture, but warned that tariffs could lead to "higher inflation and slower growth."

He also hinted at a potential nightmare scenario where the Fed's goals of keeping prices stable and achieving full employment could clash big time.

Retail data showed a whopping 1.4% surge in March sales, the strongest in two years, suggesting consumers are scrambling to stock up before tariffs kick in.

While the Trump administration hit pause on tariffs for some countries, China didn't make the cut. Treasury Secretary Scott Bessett hinted that we might get some clarity on trade policy within 90 days, but China's not playing ball unless certain conditions are met.