OP WIRE: Tariff Tensions Hit AI Sector While Retail Data, Powell Speech Take Center Stage
Stock futures turned lower Wednesday as traders evaluated the ongoing impact of Trump’s tariff trajectory and fresh export restrictions targeting high-end AI chips to China. The pressure comes one day after Wall Street’s main averages closed in the red, with early strength from strong bank earnings fading amid broader macro concerns.
1. Wall Street Eyes Tariff Fallout and Tech Sell-Off
The Nasdaq struggled in after-hours as news broke that Nvidia (NVDA) faces a $5.5 billion hit after the Commerce Department blocked its H20 AI chip exports to China. The H20 was previously allowed under the Biden-era restrictions, making this an escalation in trade tensions. The new curbs also extend to AMD (MI308 chip) and similar processors, all part of Trump’s directive to “safeguard national and economic security.”
Shares of AMD, Broadcom (AVGO), Super Micro (SMCI), Intel (INTC) and Nvidia suppliers like TSMC saw extended-hours pressure. This all came after an intraday flat session for the $QQQ, which slid from ~458 to 451.75 in after-hours on the news. Traders should expect bearish pressure in today’s early session.
Key QQQ levels to watch:
- Support: 450, 440 (loss of these levels risks a slide to 420–400)
- Resistance: 468, 480, 492 (200-day MA)
2. Retail & Earnings in Focus
Expect big premarket attention on March Retail Sales, Core Retail, and Industrial Production, all due before the bell. Analysts suggest a strong read, as many consumers reportedly made major purchases ahead of the anticipated tariff hikes.
Meanwhile, earnings season continues with Abbott Labs (ABT), Prologis (PLD), and U.S. Bancorp (USBC34)reporting before market open. In Europe, chipmaker ASML (ASML) said the tariff environment adds “murkiness” to their 2025–2026 outlook, leading to a 5%+ drop in shares.
3. Fed in the Spotlight: Powell to Speak
All eyes will be on Fed Chair Jerome Powell at 1:15PM ET, where investors are hoping for clues on rate policy and the Fed’s view on recent market volatility. Comments from Fed Governor Waller earlier this week suggested tariffs could cause a “transitory” inflation spike, but still represent a major shock to the economy.
According to analysts at Vital Knowledge:
“Powell will likely echo other Fed officials: the outlook is highly uncertain, the tariff burden is enormous, and inflation fallout will probably be temporary.”
4. China GDP Tops Forecast, But Warnings Linger
China reported Q1 GDP growth of 5.4% YoY, topping expectations of 5.2%, driven by stimulus from Beijing. However, QoQ growth was only 1.2%, short of the 1.4% forecast, indicating potential early impacts of the U.S. trade war escalation.
5. Market Sentiment Recap
Bank of America and Citigroup both posted strong trading revenue Tuesday but warned of economic uncertainty driven by tariffs. Despite Trump’s Monday hints at possible auto tariff relief, news that tariffs on the EU may persist hurt investor sentiment.
Nvidia’s after-hours drop added to concerns about a broader crackdown on tech exports—an area critical to market sentiment.
Today’s Economic Data Releases (ET):
🇺🇸 8:30AM: Core Retail Sales (Mar), Retail Sales (Mar), Retail Control (Mar)
🇺🇸 9:15AM: Industrial Production (Mar)
🇺🇸 10:00AM: Retail Inventories ex Auto (Feb), Business Inventories (Feb)
🇺🇸 10:30AM: Crude Oil Inventories
🇺🇸 1:00PM: Atlanta Fed GDPNow (Q1), 20Y Bond Auction
🇺🇸 1:15PM: Fed Chair Powell Speaks
Action Plan for OP Traders:
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