U.S. Stocks May See Initial Weakness As Nvidia Slumps

(RTTNews) - After ending Tuesday's choppy trading session modestly lower, stocks may see further downside in early trading on Wednesday. The major index futures are currently pointing to initial weakness on Wall Street, with the S&P 500 futures down by 0.8 percent.

A steep drop by Nvidia (NVDA) is likely to weigh on the markets, as the AI darling is plunging by 6.8 percent in pre-market trading.

The slump by Nvidia comes after the company said its first quarter results are expected to include up to approximately $5.5 billion of charges associated with its H20 integrated circuits.

Nvidia noted in an SEC filing that the U.S. government now requires a license for the export of the graphics processing units to China and other countries.

Dutch chipmaker ASML (ASML) is also seeing significant pre-market weakness after warning of increased uncertainty around its outlook for 2025 and 2026 due to U.S. tariffs.

However, the negative sentiment may be partly offset by a Commerce Department report showing a sharp increase by U.S. retail sales in the month of March.

The Commerce Department said retail sales shot up by 1.4 percent in March after inching up by 0.2 percent in February. Economists had expected retail sales to jump by 1.3 percent.

The surge by retail sales partly reflected a significant rebound by sales by motor vehicles and parts dealers, which soared by 5.3 percent in March after tumbling by 1.6 percent in February.

Excluding the sharp increase in auto sales, retail sales rose by 0.5 percent in March after climbing by 0.7 percent in February. Ex-auto sales were expected to rise by 0.3 percent.

Shortly before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of March. Industrial production is expected to dip by 0.2 percent in March after climbing by 0.7 percent in February.

Reports on homebuilder confidence in April and business inventories in February are also due to be released not long after the start of trading.

Later in the day, Federal Reserve Chair Jerome Powell is scheduled to speak on the economic outlook before the Economic Club of Chicago.

After ending Monday's volatile session notably higher, stocks continued to show a lack of direction over the course of the trading day on Tuesday. The major averages bounced back and forth across the unchanged line before eventually closing modestly lower.

The Dow fell 155.83 points or 0.4 percent to 40,368.96, the S&P 500 dipped 9.34 points or 0.2 percent to 5,396.63 and the Nasdaq edged down 8.32 points or 0.1 percent to 16,823.17.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.0 percent, while Hong Kong's Hang Seng Index tumbled by 1.9 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.4 percent, the German DAX Index is down by 0.3 percent and the U.K.'s FTSE 100 Index is down by 0.2 percent.

In commodities trading, crude oil futures are jumping $0.66 to $61.99 a barrel after slipping $0.20 to $61.33 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,324.30, up $83.90 compared to the previous session's close of $3,240.40. On Tuesday, gold climbed $14.10.

On the currency front, the U.S. dollar is trading at 142.60 yen compared to the 143.21 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1350 compared to yesterday's $1.1282.