DAX: Markets Stumble as Nvidia Drops and Trade Tensions Grow

Markets Wobble as Nvidia Slumps, Trade Tensions Escalate, and Investors Await Key Data

Global markets remained volatile on Wednesday as a wave of new U.S. export restrictions and deepening trade tensions between the U.S. and China sent shockwaves across Asia and beyond. The mood was particularly weighed down by a 6% after-hours drop in Nvidia shares, after the U.S. government blocked exports of its AI chips to China, a move expected to cost the company $5.5 billion.

 

Tech Crackdown, Trade Tensions Hit Sentiment

President Trump’s administration intensified pressure on China by not only targeting high-end chips but also launching a probe into potential tariffs on critical minerals. Meanwhile, Beijing reportedly halted Boeing deliveries, escalating the tech and trade conflict further. Despite China’s robust Q1 GDP growth of 5.4%, regional sentiment soured:

• Asian markets fell, led by Hong Kong’s Hang Seng Index
• Chinese chip stocks gained as investors bet on domestic substitution and state support
• Nvidia dragged U.S. tech sentiment, sparking renewed fears of a global tech supply chain shakeup

 

Safe Havens Surge, Dollar Slips

• Gold soared to a new record above $3,275/oz, continuing its rally amid economic uncertainty
• Treasury yields held firm, ahead of Fed Chair Jerome Powell’s speech at 20:15 MET, which could reinforce the recent dovish tone echoed by Fed Governor Waller
• UK inflation slowed to 2.6%, increasing odds of a Bank of England rate cut later this year
• The dollar index weakened, with EUR/USD reaching a 3-year high at 1.1475, and USD/CHF dropping to 0.8111

 

Corporate Moves: Big Tech, Tariffs, and Layoffs

• Hongkong Post suspended goods mail services to the U.S., calling U.S. tariffs “unreasonable and bullying,” impacting platforms like PDD Holdings, Alibaba, and Amazon
• Tesla halted new orders in China for Model S and Model X vehicles
• Google laid off hundreds in its Android/Pixel divisions
• GM faces $4,300 in additional per-vehicle costs for Mexico/Canada production due to tariffs; UBS cut its rating to neutral

 

Macro Focus: Oil Markets & Earnings

• OPEC cut its 2025 oil demand forecast by 150,000 bpd, citing slowing growth and rising trade uncertainty
• IEA was even more pessimistic, slashing its forecast by 300,000 bpd
• Brent and WTI prices remain near 4-year lows, weighed down by supply surpluses and weak demand
• Kazakhstan’s overproduction added pressure, though the country pledged to align with quotas in April

 

DAX Technical Picture (4H Chart)

• Current level: 21,000.0 (flat)
• Key resistance: 21,200–21,300 (cluster of EMA resistance)
• Key support: 20,474 → Breakdown exposes 20,193, 20,039
• Indicators:
• RSI neutral at 50
• Stochastic RSI rolling over, hinting at short-term weakness

Outlook: The DAX is in consolidation, awaiting a breakout. A close above 21,300 could open a path to 21,600+, while a fall below 20,474 may trigger a retest of 19,600 or lower.

 

Key Events Today (All Times MET)

• 14:30 – U.S. Core Retail Sales & Retail Sales
• 15:45 – Bank of Canada Interest Rate Decision (Expected to remain at 2.75%)
• 16:30 – Crude Oil Inventories (Decline expected)
• 16:30 – Bank of Canada Press Conference
• 19:15 – Fed Chair Powell Speaks

 

Looking Ahead: Earnings, Growth, and Sentiment

While big banks have reported stronger-than-expected earnings, attention is shifting to guidance, especially how companies plan to navigate rising tariffs, adjust supply chains, and manage margins.

Analysts are just beginning to cut S&P 500 earnings forecasts, with the consensus still at 11.2% growth, though that may drop substantially if U.S. GDP growth falls below 1%.

 

Conclusion

Markets are caught between a temporary tech relief bounce and a broader trade-induced economic drag. As central banks prepare to speak, inflation trends shift, and corporate guidance begins to roll in, volatility is likely to persist. The next key directional cues will come from today’s CPI, Powell’s remarks, and tomorrow’s Taiwan Semiconductor earnings. Until then, investors remain cautious and highly reactive.