(Reuters) – Wall Street’s main indexes slid on Wednesday, with chipmakers leading declines as Nvidia warned of steep charges from new U.S. curbs on its chip exports to China, making it one of the biggest casualties of the trade war between the two countries.

Global chip stocks took a battering on fresh evidence that U.S. President Donald Trump’s shifting trade policy was muddying the outlook for the sector, including for heavyweights Nvidia and AMD.

The U.S. Commerce Department issued new export licensing requirements for Nvidia’s H20 and AMD’s MI308 artificial-intelligence chips to China. Nvidia said it faces $5.5 billion in charges after the restrictions, while AMD said it expects an $800 million hit.

Shares Slumped for Nvidia

Shares of both companies slumped, with Nvidia – the third largest U.S. company by market value – down 6.6%.

AMD shares lost 6.1%. Other chip stocks also lost ground, with the broader semiconductor index down 3.5%.

“The long term outlook for Nvidia and the rest of the chip sector is extremely strong, but there is going to be this shroud over the industry for a while as it tries to negotiate with China over trade,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.

Dutch chip-making tools giant ASML also warned that the tariffs had led to increased uncertainty about its outlook, sending its U.S.-listed shares down 5%.

At 11:49 a.m. ET, the Dow Jones Industrial Average dropped 122.18 points, or 0.30%, to 40,246.78, the S&P 500 lost 52.41 points, or 0.97%, to 5,344.22, and the Nasdaq Composite fell 312.06 points, or 1.85%, to 16,511.11.

The broader information technology sector fell 2.6%.

The U.S. export controls are the latest escalation in tensions between the world’s two largest economies, which have imposed a series of higher tit-for-tat tariffs on imports in the past few weeks.

“I’m sure this isn’t the last salvo that we’ll see from China, or from the U.S. towards China,” Ghriskey said.

Investors will now closely monitor a speech by U.S. Federal Reserve Chair Jerome Powell later in the day for indications on how the central bank will respond to the market’s volatility as well as growth worries.

18% Cahnce of Fed Easing Rates by 25

Traders see an 18% chance of the Fed easing rates by 25 basis points at its May meeting, according to CME’s FedWatch.

Separately, Trump also ordered an investigation into potential new tariffs on all critical minerals imports.

Data showed U.S. March retail sales rose 1.4%, higher than expected, but that did little to lift sentiment.

Amid growth worries, investors are hawk-eyed about the results from companies this earnings season.

United Airlines gained 2.7% after the company reported stable bookings despite forecasting lower profit for the current quarter.

Insurance bellwether Travelers rose 4%, limiting losses on the Dow after reporting stronger-than-expected first-quarter profit.

Tesla fell 1.8% after Reuters reported that Trump’s tariffs on Chinese parts had disrupted the EV-maker’s production plans.

Advancing issues outnumbered decliners by a 1.38-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.42-to-1 ratio on the Nasdaq.

The S&P 500 posted no new 52-week highs and one new low, while the Nasdaq Composite recorded six new highs and 41 new lows.

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(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Shinjini Ganguli and Pooja Desai)