The U.S. just made it harder for China to buy advanced chips, and the stock market is not happy about it. Nvidia, one of the biggest chipmakers, saw its stock dip 0.7% before the market even opened. And it’s not just them, other tech stocks are feeling the pressure, too.
What Is The US Planning?
The U.S. is teaming up with Japan and the Netherlands to tighten chip exports to China. They want to slow down China’s AI development and keep the U.S. ahead in the AI tech race.
However, this is negatively impacting big companies like Nvidia, as their main market for selling chips has always been China. If those sales drop, their profits will surely take a hit.
With this news, investors have already started pulling out money from the market. S&P 500 futures saw a 0.50% drop, Nasdaq dropped 1.21%, while Dow futures somehow managed to stay in the green (barely) at 0.08%.
Chip Stocks Downfall
It’s not just Nvidia. Other major chip stocks also saw a drop:
- Broadcom dropped 0.3%
- AMD slipped 0.1%
- Lam Research fell 1.3%
- The whole Philadelphia Semiconductor Index dropped by 2.3%
Investors are continuously watching Nvidia’s earnings report for Wednesday. If there are any signs of slow sales, tech stocks could slide down even more.
Even Crypto Stocks Got Hit
As if the market didn’t have enough problems, Bitcoin just hit a three-month low. It dropped below $90,000, dragging Coinbase down by 8.2% and MicroStrategy down by 10%.
With all this going on, Trump has confirmed that the new 25% tariffs on Canadian and Mexican imports will still happen on March 4, 2025. Plus, his administration is now trying to limit Chinese investments in AI and semiconductors as well.
With all these new trade rules, the tech market has become quite uncertain. If Nvidia’s Wednesday earnings indicate continued strong demand for AI chips. However, if sales are slow, investors should prepare for further declines.
