Nvidia's AI Chip Export Restrictions to China Shake Markets; Yellen and Trump Address Economic Concerns

U.S. markets experienced volatility after Nvidia announced export restrictions on its AI chips to China, causing a tech stock sell-off. Treasury Secretary Scott Bessent and former Secretary Janet Yellen highlighted economic uncertainty due to tariff instability and bond market turbulence. Former President Donald Trump supports a domestic AI infrastructure initiative, facing delays in Texas due to new legislation. Royal Paper, a U.S. toilet paper manufacturer, filed for Chapter 11 bankruptcy amid industry consolidation, with Sofidel America Corp. set to acquire its assets.

Nvidia Hit by New Export Restrictions

Nvidia shares dropped more than 5% in after-hours trading following the company’s announcement that the U.S. government will require a license to export its H20 AI chips to China. The move marks an escalation in Washington’s efforts to limit Beijing’s access to advanced semiconductor technology. Nvidia, which has publicly opposed the restrictions, warned it expects to incur approximately $5.5 billion in charges in its fiscal first quarter due to inventory and purchase commitments related to the H20 line.

The announcement sent shockwaves through financial markets. Nasdaq 100 futures fell more than 1.4%, while S&P 500 futures dropped 0.9%. Gold, a traditional safe-haven asset, surged to a new record high, reflecting investor anxiety. The dollar slipped, and bond yields held steady after gains in the previous session.

Asian stocks, US futures slide after Nvidia curbs

Treasury Secretary Addresses Market Volatility and Tariffs

Treasury Secretary Scott Bessent told Yahoo Finance that the U.S. has a “big toolkit” to manage bond market volatility and that the next 90 days should bring “substantial clarity” on tariff policy. His comments come amid one of the most volatile weeks in the bond market in recent memory, with Treasury yields surging and investor confidence shaken.

Former Treasury Secretary Janet Yellen also weighed in, warning that the current tariff environment is “almost prohibitive to trade” and could impose “very significant burdens” on American households. Speaking on CNBC and Bloomberg Television, Yellen criticized former President Trump’s tariff policies as “unclear and not at all sensible,” adding that the uncertainty is paralyzing businesses and households alike.

Yellen noted that recent bond market turmoil and a weakening dollar signal a “loss of confidence” in U.S. financial leadership. “Normally, when times are chaotic and uncertainty is high, there’s a desire to invest in safe assets,” she said. “But U.S. Treasury yields went up, and that would typically attract capital inflows, boosting the dollar. Instead, the dollar declined.”

Janet Yellen Hits Trump's Tariffs With A 'Wrecking Ball' In Blistering Takedown

Trump Backs AI Infrastructure Amid Regulatory Headwinds

Former President Donald Trump has thrown his support behind a major AI infrastructure initiative aimed at boosting U.S. competitiveness with China. The plan, known as the Stargate project, involves the construction of 20 data centers across the country to support artificial intelligence development.

However, the initiative faces delays due to new legislation in Texas. Senate Bill 6 introduces a six-month review process for data center construction, in addition to existing evaluations, to protect the state’s power grid. While Texas Lieutenant Governor Dan Patrick defended the bill, saying it ensures the success of Trump’s plan, critics argue the regulations could stifle investment.

Microsoft has already canceled or deferred several U.S. data center projects, although it still plans to invest $80 billion in such infrastructure by the end of its fiscal year. Meanwhile, competition from Chinese AI firms like DeepSeek, which has rapidly released new models, has heightened urgency in Washington to accelerate domestic AI capabilities.

Trump’s AI infrastructure plan faces delays in Texas

Royal Paper Files for Bankruptcy

Royal Paper, a Phoenix-based manufacturer of bath tissue and paper products, filed for Chapter 11 bankruptcy protection on April 8. The company, which produces brands such as Earth First®, SuperSoft™, and EcoFirst®, is a third-party supplier for major retailers including Trader Joe’s, Kroger, Whole Foods, and Aldi.

Despite the filing, Royal Paper is not ceasing operations. Sofidel America Corp. has agreed to acquire all of Royal Paper’s assets through a court-supervised auction process. The transaction is expected to proceed under Section 363 of the U.S. Bankruptcy Code, with Sofidel serving as the “stalking horse bidder.”

The company, founded in 1992, cited the need for a “quick and orderly sale” to continue serving its retail and away-from-home partners. The move reflects broader consolidation trends in the paper goods industry amid rising input costs and shifting consumer demand.

Major toilet paper brand files for bankruptcy

Market Sentiment Remains Fragile

Investor sentiment remains fragile amid ongoing trade tensions and policy uncertainty. A Bank of America survey found that fund managers are “max bearish on macro” conditions, though not yet fully bearish on markets. The unpredictability of tariff announcements from Washington has made it difficult for investors to take long-term positions.

President Trump’s recent tariff moves, including a probe into levies on critical minerals and a temporary reprieve for tech products like phones and chips, have added to the volatility. The White House confirmed that total tariffs on Chinese goods have reached 145%, up from the previously reported 125%.

Meanwhile, the bond market continues to show signs of instability. Treasury yields surged again last week, and consumer sentiment has cratered, with inflation expectations reaching their highest levels since 1981.

Stock market today: Dow, S&P 500, Nasdaq futures fall as Nvidia reveals costly limits on China exports

References

• Asian stocks, US futures slide after Nvidia curbs
• Janet Yellen Hits Trump's Tariffs With A 'Wrecking Ball' In Blistering Takedown
• Trump’s AI infrastructure plans could face delays due to Texas Republicans
• A Major Toilet Paper Brand Just Filed for Bankruptcy — Here’s What We Know