Dow Drops 700 Points in Another Rough Day for Markets

Stocks dropped Wednesday as the costs of US restrictions on global trade compounded.

• The S&P 500 fell 120.93 points, or 2.2%, to 5,275.70.
• The Dow Jones Industrial Average fell 699.57 points, or 1.7%, to 39,669.39.
• The Nasdaq composite fell 516.01 points, or 3.1%, to 16,307.16.

Losses accelerated after the Federal Reserve's head said President Trump's tariffs could push economic growth lower and inflation higher than earlier thought, the AP reports.

Some companies say they're already seeing effects from the higher barriers to trade Washington is implementing. Nvidia dropped 6.9% after it said the US government is restricting exports of its H20 chips to China, citing worries that they could be used to build a supercomputer. The restrictions could mean a hit of $5.5 billion to Nvidia's results for the first quarter, covering charges related to inventory and purchase commitments. Nvidia said the government told it that its H20 integrated circuits and others of a similar bandwidth would be subject to the licensing requirements for the "indefinite future," the AP reports.

Advanced Micro Devices sank 7.4% after it said US limits on exports to China for its own chips may mean a hit of up to $800 million for inventory and other charges. United Airlines said conditions are so impossible to predict that it gave two forecasts for its financials this upcoming year, one if there's a recession and another if not. One US company that moves freight, JB Hunt Transport Services, tumbled 7.7% for one of Wall Street's sharper losses even though it reported slightly stronger profit for the latest quarter than analysts expected.

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Tariffs could also drive up inflation, at least temporarily, by pushing U.S. importers to pass along the higher costs to their customers. Fears about such price rises drove a spending binge last month, and sales at US retailers accelerated by more than economists expected. Growth surged to 1.4% in March from February, up from 0.2% the prior month. Economists said much of that was likely because US shoppers rushed to buy automobiles, electronics, and other items before their prices could rise due to possible tariffs. (More stock market stories.)