Market Turmoil: Nvidia’s Historic Loss, Trump’s Tariffs, and the AI Sector’s Struggles

Market Overview

Last week proved to be a turbulent one for global financial markets, with sharp corrections in both the S&P 500 and NASDAQ. Technology stocks led the downturn, and Nvidia was among the hardest hit, tumbling nearly 18% following adverse sector developments. The news of China’s DeepSeek startup making significant advances in AI further shook investor confidence in the U.S. AI sector. Nvidia saw the most dramatic losses, shedding $600 billion in market value in a single session—the largest one-day loss in Wall Street’s history. This blow has left the broader tech sector wounded, with U.S. equity markets struggling to recover. Pre-market trading in Nvidia shows some tentative signs of recovery, but overall sentiment remains cautious. Upcoming earnings from Microsoft and Apple, along with more clarity on tech investments, will determine the sector’s near-term trajectory.

Fundamental Factors

Global uncertainty and shifting policy dynamics are at the forefront of the current market environment. President Trump’s announcement of universal tariffs on products such as semiconductors, steel, and pharmaceuticals added fuel to the fire. The hefty tariffs aim to push these industries to produce in the U.S. but have also reignited fears of higher costs, stoking inflationary pressures. This, in turn, has renewed expectations that the Federal Reserve may maintain higher interest rates. The U.S. Dollar has responded strongly, jumping from last week’s lows, leading to retreats in the Euro, Pound, and Gold markets.

On the economic calendar, investors are also tuning into the release of U.S. Durable Goods Orders, a vital indicator of corporate investment. A strong report could help bolster market sentiment and offer a welcome distraction from the tariff narrative and growing skepticism about the U.S. AI sector.

Across the Atlantic, attention will shift to remarks from ECB’s Cipollone and President Lagarde, who are expected to hold the Eurozone’s policy rate environment steady with a possible 25 bp cut. Their comments on monetary policy and the region’s economic outlook could influence Euro movements this week.

Technical Overview

Nvidia Technical Analysis

On the H4 timeframe, Nvidia recently reached a high of 152.62, aligning perfectly with two key bearish order blocks, which added significant downward pressure. Following the announcement of major advancements by China’s AI startup, Nvidia experienced further selling pressure, forcing the price below a notable bullish order block. This previously supportive zone has now flipped into a resistance level.

A retest of this resistance zone could form a bearish ABCD pattern, which may attract technical traders looking to capitalize on the downtrend. Additionally, the price action has left a substantial gap, and market participants may attempt to fill it in the short term. Overall, the technical outlook suggests bearish sentiment remains dominant, with the newly flipped resistance level playing a critical role in Nvidia’s price trajectory.

Conclusion

As financial markets continue to face volatility, a combination of corporate earnings, economic indicators, and evolving trade policies will drive sentiment in the near term. The fallout from China’s DeepSeek breakthrough in AI and Trump’s tariff announcements has left markets on edge, requiring very strong fundamentals to stabilize investor confidence. By remaining focused on key macroeconomic developments and managing risks.

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