Chipmaker Nvidia's shares fell 6.5% in premarket trading after it said the U.S. had imposed stricter controls on its exports of one of its computer chips designed for use in artificial intelligence. Rival chipmaker AMD's shares dropped 6.8%.
Trade war concerns also were revived by a Trump administration announcement of an investigation into imports of critical minerals such as rare earths, which are used in smartphones, electric vehicles and many other products.
United Airlines jumped more than 7% in premarket after it easily beat Wall Street's first-quarter profit targets. The airline issued two profit forecasts for 2025, one reflecting a "stable" macroeconomic environment and one anticipating a “recessionary” environment.
Some economists have forecast a recession if Trump ends up implementing his tariffs, which are expected to raise prices for consumers.
For months now American consumers — according to separate surveys —- have been feeling increasingly pessimistic about the economy and their financial futures. That grim outlook often prefaces the kind of pullback in spending that can result in an economic downturn or recession.
At midday in Europe, Britain's FTSE 100 lost 0.3% after the government said inflation in the U.K. fell for the second month running in March largely as a result of lower gas prices.
Germany's DAX fell 0.7%, while the CAC 40 in Paris gave up 0.5%.
Stocks in China led Asian declines after Beijing reported the world's second largest economy grew at a strong 5.4% annual rate in the first quarter of the year, helped by strong industrial production, retail sales and exports. But in quarterly terms, growth slowed to 1.2% in January-March from 1.6% in the final quarter of 2024.
Hong Kong's Hang Seng dropped 1.9% to 21,056.98, while the Shanghai Composite index regained lost ground, adding 0.3% to 3,276.00.
Private sector economists have been downgrading their forecasts after President Donald Trump recently pushed his tariffs on most imports from China to 145%, while China raised its duties on imports from the U.S. to 125%.
Analysts at ANZ Research said activity in the current quarter is already weakening.
“Our view is that the tariff shock is caused by the unpredictability rather than the tariff itself. President Trump’s announcements have affected business sentiment and activity,” Raymond Yeung and other ANZ researchers said in a report after the China data was released.
In Tokyo, the Nikkei 225 index shed 1% to 33,920.40, pulled lower by Big Tech companies like chip testing equipment maker Advantest, whose shares dropped 6.6% and Disco Corp. which plunged 8%.
South Korea's Kospi fell 1.2% to 2,447.43, while in Australia, the S&P/ASX 200 edged less than 0.1% lower to 7,758.90.
India's Sensex rose 0.4% and Bangkok's SET climbed 0.9%.
The U.S. bond market appeared to calm after its sudden and sharp moves last week shook confidence in the status of U.S. government bonds as a safe haven against risks.
The yield on the 10-year Treasury was steady at 4.33%, down from 4.38% late Monday and 4.48% at the end of last week. A week earlier it had been at just 4.01%. Yields usually drop when investors are jittery, so this week’s moves have offered reassurance.
The value of the U.S. dollar also steadied after tumbling last week, raising more worries that Trump’s trade war also may be undermining its status as a safe-haven investment.
U.S. benchmark crude oil bounced back from early losses, gaining 51 cents to $61.84 per barrel, while Brent crude, the international standard, picked up 53 cents to $65.20 per barrel.
Trump's tariffs have raised expectations that economies will slow, denting demand for oil and other resources.
The U.S. dollar fell to 142.68 Japanese yen from 143.24 yen. The euro rose to $1.1356 from $1.1283.
Credit: AP
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