Morning Wrap: ASX 200 to fall, S&P 500 dips on tech-led selloff, Powell reignites stagflation fears

In a nutshell:

• A relatively heavy overnight session, weighed by hawkish Powell remarks and further tariff volatility

• Shares of Nvidia fell 7% as the company faces a potential US$5.5bn charge from restricted chip sales to China

• March quarter reports from BHP, Pilbara Minerals, South32 and more

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, finished off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Heavy overnight session with major US benchmarks sharply lower, but off worst levels

• Equal-weight S&P 500 outperformed the official benchmark by 96 bps, indicating some degree of resilience across ex-tech sectors 

• Gold spot rallied another unprecedented 3.4% overnight to hit US$3,353

• Tariffs and trade concerns was the main downward driver for markets, with Nvidia hit by new US export restrictions, escalating tensions with China and the US seeking to isolate China’s economy in exchange for reduced tariffs

• Retail investors keep buying the dip, many young investors have only experienced bull markets, leading them to believe that downturns are short-term (BBG)

STOCKS

• European first-quarter corporate profits expected down 3% on tariff turmoil (RT)

• Ford says it could raise prices on new vehicles next month if tariffs don't ease (AN)

• Temu, Shein cut spending on US ads including Meta, YouTube by average of 31% (FT)

• ASML orders miss expectations amid chip sector weakness and US tariff threat (BBG)

• United Airlines cuts capacity, warns economy is hard to predict (FT)

• Vale's iron ore output falls short of expectations on poor weather (BBG)

CENTRAL BANKS

• Bank of Canada holds rates after seven consecutive cuts (RT)

TARIFFS

• Nvidia and AMD hit by up to $5.5bn and $800m after US government plans to impose license requirements for exports to China of its H20 AI chips (CNBC)

• Trump says he will attend a meeting of Japanese and US trade officials on Wednesday (RT)

• Latest tariffs have only generated $500 million, well below Trump's estimate (CNBC)

• Nissan US chief says tariffs will hammer lower-income car shoppers (Reuters)

• US to isolate the world from China, ongoing tariff negotiations to pressure trading partners to limit dealings with China (WSJ)

• China open to trade talks but wants the US to show more respect and address concerns around sanctions and Taiwan (BBG)

• Trump administration's 90-day tariff pause unlikely to see quick deals, but Bessent says investors should still have clarity (YF)

• US orders tariff probe on all US critical mineral imports (RT)

• China and Brazil to discuss expanding farm exports amid US tariffs (SCMP)

ECONOMY

• US March retail sales soars 1.4% month-on-month vs. 1.3% ests, the biggest jump in over two years as consumers rushed to purchase items ahead of potential tariffs (BBG)

• China's Q1 growth surges ahead of tariffs, but trade war clouds outlook (WSJ)

• UK inflation cooler-than-expected in March, down to 2.6% from 2.8% in the previous month but Trump tariffs and deteriorating jobs market loom (FT)

• WTO cuts 2025 forecast for global merchandise trade, citing US tariffs and spillover effects (RT)

ASX TODAY

• Quarterlies galore – A long list of March quarter updates WAF, PLS (looks a little weak), BHP, S32

• Abacus Storage King REIT shareholders not impressed with the indicative takeover offer of $1.47 per share or an 8% discount to underlying assets (The Aus)

• Alcoa reports 1Q25 EPS of $2.15 vs. $1.68 ests, positive aluminium market led to stronger results for the quarter, reaffirmed FY guidance (AAI)

• BHP partners with Acciona Energia to explore development of pumped hydro energy storage project at Mt Arthur coal (BHP)

• Challenger reports Q3 assets under management down 4% QoQ to $125.6bn, downgrades full-year NPAT guidance to $450-465m vs. prior $440-480m (CGF)

• De Grey Mining removed from S&P/ASX 200 Index, effective 24-Apr, to be replaced by Generation Development Group (DEG)

• Ridley Corp to sell Wasleys Feedmill for $22m, trading update flags 2H25 trading conditions impacted by lower selling prices of ingredients (RIC)

• Rio Tinto warns on iron ore shipments after cyclone disruptions, reports lowest iron ore output in five years, risks losing top producer spot to Vale (RT)

• Wisetech faces formal investigation by ASIC regarding market disclosures (WTC)

WHAT TO WATCH TODAY

• Here comes the turn: The market's had a good few days but here comes the pullback. Positive economic data — solid China numbers, cooling UK inflation, and favorable US CPI/PPI figures last week — has been overshadowed by renewed tariff volatility, particularly in rare earths and semiconductors, as well as the risk of no deals amid the 90-day tariff pause. This risk-off sentiment may weigh on local tech and growth-oriented sectors. Still, we expect to outperform on a relative basis.

• Gold is king: There are many reasons to be bullish gold but only one reason to be bearish – because the price is too high. The Gold Miners ETF (GDX) continues to push 13 year highs, and was the best performing ETF on our overnight watchlist.

BROKER MOVES

• Bank of Queensland upgraded to Equal-weight from Underweight; target up to $6.60 from $6.20 (MS)

• Genesis Minerals downgraded to Neutral from Outperform but target up to $4.20 from $3.80 (MQG)

• Iluka Resources upgraded to Overweight from Neutral; target up to $4.75 from $4.50 (JPM)

• Nanosonics downgraded to Sell from Hold; target cut to $4.05 from $4.06 (BP)

• Select Harvests upgraded to Buy from Neutral; target up to $5.40 from $5.0 (UBS)

Stocks trading ex-dividend: 

• Thu 17 Apr: None

• Fri 18 Apr: None

Other ASX corporate actions today: 

• Dividends paid: ARB Corporation (ARB), Brisbane Broncos (BBL), Charter Hall Social Infrastructure REIT (CQE), FFI (FFI), Flight Centre Travel Group (FLT), Lindsay Australia (LAU), Pepper Money (PPM), PRL Global (PRG), Ramelius Resources (RMS), Rio Tinto (RIO), Veem (VEE)

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEDT):

• 11:30 am: Australia Unemployment Rate (MAR)

• 10:15 pm: Eurozone Interest Rate Decision (ests 25 bp cut to 2.40%)

• 10:30 pm: US Building Permits, Housing Starts (MAR)