April 2025 — Global markets took a sharp downward turn on renewed trade tensions between the United States and China, combined with a wave of disappointing earnings reports from major semiconductor companies. The volatility has reignited concerns about slowing global growth and further disruption to international supply chains.

Tariff Escalation Strikes Tech Sector

Markets were rattled after the White House imposed new restrictions on Nvidia Corp., revoking prior concessions and requiring a license for its H20 chip exports to China “for the indefinite future.” The move, aimed at preventing sensitive U.S. chip technology from being used in Chinese supercomputers, led to a 6.8% drop in Nvidia’s shares, dragging the Nasdaq 100 down 1.8% and the broader S&P 500 down 1%.

“This is unnerving for two reasons,” said Vishnu Varathan, head of economics at Mizuho Bank.

“It highlights the unpredictable nature of U.S. tariffs and suggests that U.S.–China tensions remain deeply rooted, despite surface calm.”

The weakness extended across the sector. ASML Holding NV dropped 5.1% in U.S. trading after reporting weaker-than-expected chip orders.

Global Trade Outlook Darkens

The World Trade Organization (WTO) slashed its 2025 trade forecast, projecting a 0.2% decline in global trade — nearly three percentage points lower than it would have been without the new tariffs. China reportedly seeks more respect and clarity from the Trump administration before reengaging in negotiations.

The global equity index tracked by Bloomberg fell roughly 1%, with technology and chipmakers taking the brunt of the selloff.

Investors Turn to Safe Havens

With equity markets under pressure, investors rotated into safe-haven assets.

• Gold surged to a record high,
  
• The Swiss franc gained ground,
  
• The U.S. dollar weakened, as investors’ confidence in the world’s reserve currency wavered in the face of intensifying geopolitical risk.

All Eyes on the Fed

Meanwhile, swaps markets continue to price in at least three interest rate cuts in 2025, even after U.S. retail sales rose 1.4% in March, marking the strongest monthly gain in over two years.

Fed Chair Jerome Powell is scheduled to speak later today, and investors are eager for clues on whether the central bank might take action to stabilize bond markets.

Between protectionist policy shifts, renewed U.S.–China friction, and sector-specific headwinds in technology, investors are bracing for continued volatility in global markets.