Dow, S&P 500, Nasdaq smoked as Powell warns of 'challenging' tariff impact, Nvidia plunges 7%

  US stocks tumbled on Wednesday with tariff fears returning to Wall Street in earnest, as Nvidia revealed costly new curbs on chip exports to China and Fed Chair Jerome Powell warned of the "challenging" impacts to come from the uncertainty around President Trump's trade policy.

The benchmark S&P 500 dropped more than 2.2% while the Dow Jones Industrial Average shed roughly 700 points, or around 1.7%. The tech-heavy Nasdaq Composite fell over 3% as the new chip provisions weighed on the tech sector.

Stocks hit session lows on Wednesday afternoon as Powell said during a speech in Chicago that the central bank will "wait for greater clarity" before considering any interest rate adjustments. He said he expects Trump’s tariffs to generate "higher inflation and slower growth."

"We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension," Powell said.

Meanwhile, AI chip giant Nvidia also found itself caught in the crossfire of the burgeoning US-China trade war. 

Shares fell about 7% after the company revealed that the US government has imposed new restrictions on its chip exports to China. The company said the move would result in $5.5 billion in charges.