The S&P 500 futures fell 1.6% early on Wednesday, falling to 444.32, eroding almost two-day profit.
The move came as it digested the rising uncertainty surrounding US trade policy, including potential new tariffs targeting China’s semiconductors and drugs.
However, the White House also has tariffs on some Chinese products now up to 245% without confirmation of imports being charged at this rate.
The move aims to show China’s strength against trade retaliation and to show serious consequences, but lacking specificity leads to ambiguity about the breadth of applications.
Chinese media and officials responded with a firm attitude to the White House’s 245% tariff announcement and were relentlessly willing to protect national interests while seeking negotiations based on mutual respect.
As of 8am GMT, futures on the benchmark index were down more than seven points from the previous 451.56.
Meanwhile, Bitcoin has continued to slow performance across a variety of global assets over the past 24 hours. Traded about $83,400 at the time of writing, digital assets have moved almost sideways after tracing a sudden overnight loss, deviating from the wider flight-to-safe shift seen in traditional markets.
Cross Asset Diversion: Bitcoin stalls as a bond, and gold catch bids
The multi-asset comparison chart below captures the disruption of market behavior since the US market opened yesterday.
Gold rose 2.7%, with US 10-year bond prices rising 0.55%, strengthening the defensive leaps with investor positioning. Even traditionally insulated Chinese 10-year bonds recorded a modest rise of 0.19%.
However, the stock was facing widespread sales pressure. E-Mini S&P Futures (ESM2025) fell 2.06%, while oil slid 1.13%. Both reflect updated macroeconomic attention following the White House confirmation that US tariffs on Chinese imports have reached virtually 145%.
The losses arise during a new national security investigation into China’s semiconductor and drug exports. This is interpreted as a prelude to further tariff escalation.
The US Dollar Index (DXY) fell 0.44% over the same period. This has been partially reduced due to weak sentiment over further trade separations.
Bitcoin fell 2.8% over the same period, not performing all other major asset classes on the chart, including oil and S&P futures, which recorded lower losses.
Trade uncertainty promotes defensive allocations and leaves Bitcoin on the sidelines
The market response appears to reflect an increasing US-China tension over capital allocation decisions.
CNBC surpassed expectations, surpassing expectations, with China’s first quarter GDP rising 5.4%, but investment banks cut their annual forecasts, citing concerns about weakening to the US and a sharp decline in capital expenditures.
The global supply chain appears to be undergoing sustained fragmentation due to China’s share of China’s exports, down 14.7% from 19.2% in 2018.
Reactions across equities and bonds suggest an increase in demand for hedges and current assets, while the stagnation of Bitcoin could mean a reassessment of its current utility in the macrohedge portfolio.
In contrast to gold, which sets a new record of nearly $3,261 per ounce, Bitcoin’s price action does not reflect similar demand despite the inflation risks associated with rising tariffs.
The decline in performance may reflect uncertain signals around spot ETF flows, despite the institutional narrative continuing to move towards Bitcoin’s role as a macro hedge.
However, outside of the last 24 hours, Bitcoin has shown relative strength compared to traditional assets since the beginning of April, with S&P 500 futures (ESM2025) down more than 4%, oil down nearly 13%, and the dollar index (DXY) down 4.5%.
Despite recent DIP, Bitcoin is one of the best performers on the windows of this multiple weeks, tracking only gold, which has surged by almost 6%.
Semiconductor tensions are mounted as Nvidia flags $5.5 billion of export risk
Nvidia further exacerbated market uncertainty, revealing that the US government’s licensing requirements limit H20 AI chips exports to China indefinitely and cite national security risks.
According to the BBC, the company predicted a $5.5 billion hit in revenue from inventory-related bills and unmet orders. The move was widely interpreted as enhancing the broader US strategy to reduce access to China’s cutting edge semiconductor technology.
Semiconductor-related stocks were rapidly declining in Europe. Dutch chip-making equipment company ASML fell 6.5% after online booking and guidance errors citing “export uncertainty,” while Peer ASM International fell 4.5%.
As CNBC noted, these losses were heavier and heavier on the Pan-European Stoxx 600, down 0.8% in open. The German Dax and France CAC 40 also fell by about 1%, with investors feeling putting even more pressure on macro data showing UK inflation weaker than expected and lower beer sales in Heineken despite revenue beer vandalising.
Outlook
On past days, the sudden divergence in the performance of assets underscores the extent to which traditional hedges like gold and sovereignty reassert themselves in new trade disputes.
In contrast to the upward spike in gold and combined inflows, Bitcoin’s muted reaction raises new questions about its short-term sensitivity to global macrocatalysts and its position in institutional portfolio during geopolitical shocks.
The market appears to be long-term, respectable and priced, as the White House emphasizes that future negotiations are conditional on China’s concessions.
At this point, Bitcoin’s relative absurd amidst tariff surges and declining stock futures remains a careful position by investors to consider the evolving correlation of assets with the broader risk market.
