The US Stock markets dropped sharply on Wednesday, mainly due to a warning from tech giant Nvidia and fresh concerns about U.S. tariffs.

The Dow Jones fell 699 points (1.73%) to close at 39,669, the S&P 500 dropped 2.24% to 5,275, and the Nasdaq sank 3.07% to 16,307. The tech-heavy Nasdaq is now nearly 19% below its recent high, edging closer to what’s known as a “bear market.”

Nvidia Takes a Hit, Dragging Tech Stocks Down

Nvidia’s stock dropped 6.9% after the company announced a $5.5 billion charge related to new U.S. export rules. The government is now requiring a special license to ship Nvidia’s high-end chips to China and other countries.

The situation got worse after reports that the U.S. plans to crack down on a Chinese startup called DeepSeek, which uses Nvidia’s chips.

Other chipmakers also fell:

• AMD dropped 7.4%
• Micron fell 2.4%
• A chip-focused fund, the VanEck Semiconductor ETF, was down over 4%
• ASML’s U.S. shares tumbled 7% after disappointing earnings

Experts say the S&P 500 is more tech-heavy than ever, which means when tech stocks fall, the whole market feels it.

Tariffs Add More Pressure

Later in the day, markets dipped even further after Federal Reserve Chair Jerome Powell warned that tariffs could push inflation higher and make the Fed’s job harder.

He said the central bank might face a tough choice between keeping prices stable and supporting the job market.

Earlier this month, former President Donald Trump announced new tariffs on several countries. While some were delayed for 90 days, China was not. Over the weekend, Trump said smartphones and PCs would be temporarily exempt—but hinted that could change soon.

Since the tariff news began on April 2:

• The S&P 500 is down around 7%
• The Nasdaq has dropped 7.4%
• The Dow is down about 6%