Market Update – 4/17/2025

After a brief reprieve, thanks to electronics being spared from the harshest tariffs, market volatility is on the rise again as U.S.-China trade tensions escalate.

Despite its newly announced $500 billion commitment to build AI infrastructure in the U.S., Nvidia found itself at the center of the dispute. The U.S. government imposed fresh restrictions on exports of its H20 chip to China, citing national security risks.

The move appears largely retaliatory, as the H20 was intentionally designed to comply with earlier export rules, offering only ~20% of the performance of Nvidia’s H100 chip (launched two years ago), and just 10% of the company’s latest Blackwell-class GPUs.

The H20 accounts for the bulk of Nvidia’s estimated $17 billion in annual China sales, or about 13% of total company revenue. In response, Nvidia announced a $5.5 billion charge related to inventory write-downs and purchase commitments linked to the chip.

We continue to like Nvidia as a go-to, long-term play on artificial intelligence, but the near-term outlook is clouded. The ban undermines expected upside and has weighed on sentiment across the broader tech sector, pulling down both Nvidia shares and tech-heavy indexes.

Away from trade headlines, US economic data was broadly supportive. Fed Chair Jerome Powell acknowledged continued strength in the economy during remarks this week but also flagged persistent inflation risks. His comments dampened market expectations for imminent rate cuts, adding another headwind for equities.

We’ll continue to monitor developments closely and will keep you updated as conditions evolve.

As a reminder, our office and markets will be closed this Friday (4/18/25) in observance of Good Friday.

We wish you a safe and Happy Easter.