Global markets face triple threat
Global markets plunged as a triple shock rattled investors: Nvidia faces a staggering $5.5 billion charge from US restrictions on China chip exports, Federal Reserve Chair Powell warned of persistent tariff-induced inflation and the WTO dramatically reversed its trade forecast from 2.7% growth to a 0.2% contraction—the first predicted decline since the pandemic.
Global market snapshot
Australian market braces for data releases amid global uncertainty
Australian investors are focusing on key economic data releases today, with the March employment report due at 11:30am. Economists expect a rebound of around 40,000 jobs following February’s unexpected 52,800 slump, with the unemployment rate forecast to hold steady at 4.1%.
The jobs data takes on added significance with Reserve Bank of Australia (RBA) rate cut expectations mounting. According to Refinitiv data, about 69% of market participants anticipate a 0.25% rate cut at the RBA’s May meeting, while a growing number are betting on a more aggressive 0.5% reduction. Very few expect rates to remain on hold, reflecting the shifting economic outlook.
In the resources sector, global miner BHP Group reported a slight decline in third-quarter iron ore production, as strong volumes were offset by weather disruptions from tropical cyclones Zelia and Sean. Despite these challenges, BHP achieved record nine-month output from its Central Pilbara operations, benefiting from the completed ramp-up of South Flank and a 13% increase in mining activity.
Tech sector reels from Nvidia’s China chip export restrictions
The technology sector is leading market declines after Nvidia revealed it would take a $5.5 billion charge related to new US government restrictions on chip exports to China. The company’s shares tumbled nearly 7% after announcing it requires a special license to ship its H20 graphics processing units to China, with no indication of when this requirement might end.
The ripple effects spread across the semiconductor industry, with Advanced Micro Devices falling 6.5% as it faces similar restrictions, forcing the company to take a charge of up to $800 million. Asian chipmakers felt the impact as well, with Samsung Electronics and SK Hynix dropping approximately 4%, while Taiwan Semiconductor Manufacturing Company fell 2.5%.
Apple bucked the trend earlier in the week, rising 6.5% following reports that smartphones and computers would be exempt from the latest round of tariffs. However, these gains were partially erased in Wednesday’s broader market decline.
