Tech stocks slide, gold soars amid deepening US-China trade clash

Stock markets worldwide dropped sharply on Wednesday as US-China trade tensions escalated, triggering a flight to safe assets and record-high gold prices, Reuters reported. 

New US licensing restrictions targeting sales of Nvidia and AMD’s AI chips to China sent shockwaves through global markets. Nvidia warned the move could cost $5.5 billion, with its shares plunging almost 7%.

The global MSCI stock index fell 1.5%. In the US, the Dow slid 1.7%, the S&P 500 lost 2.2%, and the Nasdaq dropped 3.1%.

“Capital markets remain caught between news about new tariffs and, on the other hand, about tariff negotiations or suspensions,” said Wells Fargo’s Paul Christopher.

Federal Reserve Chair Jerome Powell signalled no imminent rate moves, noting that market volatility reflected the Trump administration’s unpredictable tariff strategy. “Powell is doing what the rest of us are doing – waiting and watching,” commented Jamie Cox of Harris Financial Group.

Retail figures showed strong vehicle sales in March ahead of expected tariffs, while broader spending softened. President Trump has initiated a probe into tariffs on vital mineral imports, adding to reviews already underway on chips and medicines. Meanwhile, China has reportedly told airlines to halt Boeing jet deliveries.

Europe’s STOXX 600 index dipped 0.2%, dragged by tech losses. In Asia, markets were mixed: Chinese blue chips rose 0.3% thanks to earlier GDP data, but the Hang Seng fell 1.9%.

Amid the uncertainty, gold surged 3.5% to a record $3,339 per ounce. ANZ raised its forecast to $3,600 by year-end. Treasury yields also fell, with the 10-year dropping to 4.283% amid expectations of rate cuts by summer.

The US dollar weakened further, slipping 0.7% to its lowest since April 2022. The yen and franc rallied 0.8% and 1.2% respectively. Bank of Japan Governor Kazuo Ueda suggested a pause in rate hikes if tariffs hurt Japan’s economy.

Oil rose to a two-week high on new US sanctions against Chinese buyers of Iranian oil. Bitcoin edged up 0.5% to $84,389, though it remains nearly 10% lower for the year.