Nvidia Falls 6% After $5.5B China Chip Hit

Nvidia's shares dropped 6% in after-hours trading after the US imposed new export licensing requirements for its AI chips to China, a move expected to cost the company $5.5 billion. Asian markets turned red, with Hong Kong's Hang Seng index sliding 2.3% and MSCI Asia-Pacific index down 1.3%, while Wall Street futures pointed lower and gold hit a record high of $3,275. Meanwhile, China reported better-than-expected Q1 GDP growth at 5.4%, and the UK is set to release March inflation data amid growing expectations for a Bank of England rate cut in May.

Equities

The FTSE 100 rose 1.4% on Tuesday, supported by gains in financial and defence stocks. The FTSE 250 also gained 1.5%, with investors responding positively to potential tariff relief signalled by US President Donald Trump. Among the top risers in the FTSE 100 was 3i Group, up 6.1% after Citigroup raised its price target for the investment firm. Rolls-Royce climbed 3% after the US

In the FTSE 250, B&M shares rose 5.7% after the discount retailer forecast annual profit to come in above the midpoint of its guidance range. Tate & Lyle jumped 6.2%, with the ingredients company reaffirming that results for 2025 are expected to match current forecasts. Labour market data showed a decline in employment ahead of a tax increase, but wage growth remained strong, maintaining pressure on the Bank of England. Markets now price in over a 90% chance of a 25-basis-point rate cut at the next BoE meeting in May.

In the US, the Dow Jones slipped 0.4%, the S&P 500 fell 0.2%, and the Nasdaq edged down 0.1% as investors remained focused on trade tensions. Bank stocks provided some support to the broader market. Bank of America rose 3.6% after reporting a first-quarter profit beat, driven by higher interest income.

Citigroup also reported positive results, helping to lift sentiment in the financial sector. Boeing was one of the biggest drags on the Dow, dropping 2.4% after a report that China had ordered domestic airlines to halt new Boeing deliveries, following the announcement of a 145% tariff on Chinese imports by the US administration.

In healthcare, Johnson & Johnson fell 0.5% after missing estimates for medical device sales, despite posting a beat on both revenue and profit overall. Merck shares declined 1%. Within the auto sector, Ford dropped 2.7% and General Motors slipped 1.3% following a downgrade by Barclays, which flagged pressure on earnings from higher US tariffs. The S&P consumer discretionary index was down 0.8%. Despite relatively good first-quarter earnings so far, many companies remain cautious about offering guidance given the changing trade landscape.

Forex & Commodities

The US dollar strengthened against both the euro and the Japanese yen on Tuesday, reversing some of last week’s weakness. The euro fell 0.7% to $1.127, down from a three-year high of $1.1473, ahead of a widely anticipated 25 basis point rate cut by the European Central Bank this Thursday. The dollar edged up 0.12% to 143.16 yen, staying close to its recent six-month low. The Swiss franc slipped 0.91% against the dollar, pulling back after the US currency fell to a decade-low last week. Sterling rose 0.15% to $1.3209, reaching its highest level since early October. The shift in currency sentiment follows recent US inflation data showing import prices unexpectedly declined in March, driven by falling energy costs.

Gold prices surged to a record high of $3,294.99 per ounce, before settling at $3,287.79, up 1.9% on the day. US gold futures also climbed nearly 2% to $3,304.20. The rise came as investors responded to ongoing US-China trade tensions and a softer dollar. Analysts at ANZ raised their year-end gold price forecast to $3,600 per ounce, with a six-month forecast of $3,500. Spot silver gained 0.8% to $32.56 an ounce, while platinum and palladium eased slightly.

Oil prices fell around 1% as concerns about weaker global energy demand weighed on markets. Brent crude dropped 66 cents to $64.01 a barrel and WTI declined 69 cents to $60.64. The International Energy Agency lowered its global demand growth forecast for 2025 to 730,000 barrels per day—down from 1.03 million bpd a month earlier. US crude stocks rose by 2.4 million barrels last week, while gasoline and distillate inventories fell, according to API data.