US markets remain choppy amid tariff uncertainty, Nvidia faces export controls hit

The US market continued to endure volatility amid the unpredictable trade policy of the Trump administration.

After bouncing back with a real bang last week on news of a 90-day pause on most reciprocal tariffs, stocks were once again on the back foot as the trade war between the US and China showed little sign of dampening down. Though hopes of some progress on trade negotiations did give stocks a lift at the open on 17 April.

Social media platform Meta Platforms fell as it faced the start of an antitrust trial which could see it forced to unwind its acquisitions of Whatsapp and Instagram.

While shining in a tricky market were telecommunications infrastructure play Crown Castle International and Hewlett Packard Enterprise. The latter after activist investor Elliott took a $1.5 billion stake. The biggest gain was enjoyed by Eli Lilly on positive trial data for an oral version of its weight-loss drug.

Nvidia

If tariffs weren’t bad enough, the Trump administration is turning the screws on China even more by tightening what it classes as ‘advanced tech’ that shouldn’t be sold to China, and it threw another bomb at Nvidia that blew more of its stock market premium away.

Nvidia expressly designed its H20 ASIC (application specific integrated chip) for Chinese customers barred from buying its most advanced GPUs (graphics processing units) that power improved AI reasoning models, rules put in place by the Biden administration to cap China’s ability to compete in AI on the back of US-designed tech.

Now, US officials shave decided that even these are too state-of-the-art, adding them to the banned list, and leaving Nvidia about $5.5 billion worth of inventory it can no longer sell that now must be written off. That’s about a third of the H20 ASICs ordered by the Chinese. OK, not much Nvidia can do about it and probably better to take the hit and move on, yet the chip designer remains on the hook from former president Biden’s AI Diffusion rules. These rules would further cap nations Nvidia can sell to and are due to go into effect on 15 May unless the Trump administration intervenes, and it’s anybody’s guess if it will.

Still, it’s not all doom and gloom. Wedbush analysts calculate that China represents just a fraction more than 10% of Nvidia's revenue, and Bank of America analysts reckon the loss of China sales is manageable, with strong demand for Blackwell and Hopper processors in the US and other unrestricted markets likely to help offset lost H20 revenues.

Boeing

Despite closing modestly in the green, aerospace giant Boeing’s shares suffered a turbulent week after China ordered its airlines to halt deliveries of the company’s jets amid an escalating trade war with the US. The Chinese authorities’ move followed the imposition of 145% tariffs on China by the US. Boeing, which sees China as a key growth market, is actually America’s biggest exporter, so the development represents a blow to the US economy.

Part of a duopoly with Airbus, the embattled airplanes maker has racked up billions in operating losses since 2018, the last year Boeing delivered an annual profit. The company has been fighting to restore its reputation for safety since the grounding of its 737 Max jets following two fatal crashes in 2018 and 2019 and a terrifying door panel blowout in the middle of an Alaska Airlines flight in January 2024, shortly after the new 737 Max 9 had taken off from Oregon. The incident forced an emergency landing although no serious injuries were reported.

UnitedHealth

UnitedHealth plunged on Thursday (17 April) after the health insurance giant missed first-quarter earnings and cut its full-year profit forecast. The largest seller of Medicare Advantage health plans cited ‘heightened activity’ towards the end of the quarter, far above the level planned for, most notably in physician and outpatient services. The company also cited unanticipated changes in the profile of its Optum Health members, impacting 2025 reimbursements.

Consequently, the company slashed its 2025 EPS (adjusted earnings per share) forecast to a range of $26 to $26.50 from a prior expectation of $29.50 to $30. Consensus analyst estimates were calling for a profit of $29.73 according to LSEG data. The downgrade to earnings comes after the company missed targets for medical costs several quarters in a row, reflecting persistent hurdles including rising medical expenses and stricter federal reimbursement rules.

The share price drop had a knock-on effect across the sector with CVS Health and Humana shares falling in sympathy.