In a shocking turn of events, the cryptocurrency market faced a significant downturn late Wednesday as Nvidia's stocks plummeted following a staggering $5.5 billion charge. This financial blow was attributed to the Trump administration's decision to restrict sales of the company's H20 chip to China.

Bitcoin, the titan of cryptocurrencies, witnessed a drop to $83,600, retreating from an earlier two-week peak of $86,440, according to CoinDesk data. XRP mirrored this decline, dipping more than 2% to $2.08, while Cardano's ADA token fell a steep 4% to $0.61. The broader CoinDesk 20 Index also suffered, losing over 2%.

As Nvidia's shares nosedived, down 8% to $89.10, concerns mounted around coins connected to artificial intelligence (AI). The company's regulatory filing revealed expectations of a massive write-down, signaling trouble in the tech sector.

Adding to the gloomy market sentiment, Nasdaq futures dropped over 1%, injecting negativity into risk assets across the board.

Looking ahead, the upcoming U.S. retail sales report for March, scheduled for release Wednesday morning, is being watched closely. Economists surveyed by Dow Jones predict a 1.2% growth in consumer spending for the month, a notable increase from February's mere 0.2% rise.

A positive retail report could help alleviate recession fears, which have been exacerbated by the ongoing trade tensions ignited by President Trump. Surprisingly, market reactions may overlook this data as backward-looking, disregarding the recent escalation in trade disputes.

Federal Reserve Chairman Jerome Powell is also set to address the Economic Club of Chicago on Wednesday, where he will share his perspective on the U.S. economy. Traders are anxious, holding their breath for Powell's insights amidst the swirling trade war and recession concerns.

"All eyes are on Powell. The market is on edge, anticipating any indication that the Fed might need to cut rates sooner than expected," noted Secure Digital Markets in a poignant research note.

In light of the current trade tensions, inflation measures based on market expectations have dipped, hinting at a potential disinflationary impact due to Trump’s tariffs. This situation could grant the Federal Reserve more flexibility in adjusting interest rates.

Earlier this week, Federal Reserve Governor Christopher Waller indicated that if new tariffs were reimposed, the bank might be compelled to implement a series of swift "bad news" rate cuts, further complicating the financial landscape for traders.