Stocks fell lower on Wednesday as investors reacted to new a U.S. license for semiconductor exports to China, impacting global tech outlooks. The Dow Jones Industrial Average lost nearly 700 points, while the S&P 500 Index and Nasdaq Composite declined about 2.2% and 3%.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Nvidia
Semiconductor stocks were also pressured by disappointing quarterly earnings from ASML
Last week, the White House announced a temporary exemption from President Donald Trump's so-called reciprocal tariffs on electronic products including smartphones, computers and semiconductors. Still, market uncertainty over the key sector persist, as the U.S. Commerce Department said Tuesday it was conducting a national security investigation into imports of semiconductor technology and other related products.
The World Trade Organization (WTO) warned Wednesday that global trade outlooks have "deteriorated sharply," in response to Trump's tariff policies. The WTO estimates in its latest "Global Trade Outlook and Statistics" report that the volume of world merchandise trade is now expected decline by 0.2% in 2025, before rising 2.5% in 2026.
"Risks to the forecast include the implementation of the currently suspended reciprocal tariffs by the United States, as well as a broader spillover of trade policy uncertainty beyond U.S.-lined trade relationships," the report read.
"If enacted, reciprocal tariffs would reduce world merchandise trade growth by an additional 0.6 percentage points, posing particular risks for least-developed countries (LDCs), while a spreading of trade policy uncertainty (TPU) would shave off a further 0.8 percentage points. Taken together, the reciprocal tariffs and spreading TPU would lead to a 1.5% decline in world merchandise trade volume in 2025."
Federal Reserve Chair Jerome Powell further impacted sentiment on Wednesday, pulling the stocks to session lows, as he said Trump's tariffs could increase near-term inflation and effect the central bank's efforts to stabilize the economy.
"We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension," Powell said in remarks before the Economic Club of Chicago. "If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close."
On the Economic Front:
U.S. Retail Sales showed strong consumer spending in March despite declining economic outlooks, the Commerce Department reported Wednesday. An advanced headline estimate showed sales increasing 1.4% month-to-month, coming in above consensus estimates and jumping from February's 0.2% gain. Annually, retail sales climbed 4.6% in March.
Excluding autos, sales rose by a more-than-expected 0.5%; economists had expected vehicle sales to rise as buyers rush to buy ahead of Trump's tariffs. Motor vehicle and parts sales jumped 5.3%.
In Earnings News:
United Airlines
The company also plants to reduce its summer flight schedule in response to disappointing domestic travel trends, which fell 3.9% year-over-year. Ticket purchases for international flights, however, increased more than 5% during the quarter. United expects second-quarter adjusted earnings per share of $3.25 to $4.25 due to this strong demand for pricier seats.
Looking Ahead:
Market participants will react to key housing market data for March on Thursday, alongside earnings reports from companies including Taiwan Semiconductor Manufacturing Company
