The mood in the equity and cryptocurrency markets turned sour late Wednesday as Nvidia shares crashed in after-hours trading following a $5.5 billion charge tied to the Trump administration’s decision to ban the company’s H20 chip sales to China.
Bitcoin, the leading cryptocurrency by market value, fell to $83,600, extending its retreat from the two-week high of $86,440 reached earlier in the day, according to CoinDesk data. Payments-focused XRP followed a similar trajectory, down over 2% to $2.08, while Cardano’s ADA token slipped 4% to $0.61. The CoinDesk 20 Index, a broader market gauge, weakened more than 2%.
Meanwhile, coins allegedly associated with artificial intelligence (AI) continued to fare worse as shares in NVDA tanked 8% to $89.10 after the company disclosed in a regulatory filing that it expects to write down $5.5 billion in the fiscal first quarter due to the new restrictions on exports of its H20 chip to China.
The news followed unusual activity in NVDA put options that hinted at an impending market swoon. Futures tied to the Nasdaq index also fell over 1%, offering negative cues to risk assets in general.
Investors are now awaiting the release of the U.S. retail sales report for March, which is expected to show a 1.2% increase in consumer spending on the month, up from a 0.2% climb in February, according to economists polled by Dow Jones. A better-than-expected report could help alleviate recession fears triggered by President Trump’s trade war with China and other trading partners. However, there remains the risk that markets will dismiss it as backward-looking, failing to account for the significant escalation in trade tensions seen this month.
Federal Reserve Chairman Jerome Powell is also scheduled to speak at the Economic Club of Chicago regarding his outlook for the U.S. economy. Many market participants are looking to Powell for clues about future monetary policy, especially in light of rising recession chatter and the potential for more aggressive interest rate cuts.
As market-based measures like inflation breakevens have dropped amid trade tensions, this disinflationary impact of tariffs could provide the Fed with the leeway needed to cut rates. Early this week, Federal Reserve Governor Christopher Waller indicated that the bank would be forced to quickly implement a series of “bad news” rate cuts if the president reinstates tariffs that were temporarily suspended.
In summary, the intersection of trade tensions and regulatory challenges is creating a volatile atmosphere for both equities and cryptocurrencies, with stakeholders closely monitoring economic reports and central bank communications for further guidance.
Read more: Bitcoin Hovers at $85K as Fed’s Waller Suggests ‘Bad News’ Rate Cuts if Tariffs Resume
