Stock prices of the major technology company fell in Asia on Wednesday, bringing down a wider market after US chip giant Nvidia revealed that the US government would limit some sales to China.
They were the first major restrictions President Trump's administration has made to sell semiconductors overseas. Nvidia controls the market for chips used to build artificial intelligence systems, and currently requires a license to sell AI chips to China. It will increase the chances that its sales to China will evaporate in the coming months, and the US has curtailed chip exports to geopolitical rivals, which will put an end to its contracted business.
In a regulatory filing Tuesday, Nvidia said a $5.5 billion hit would be needed for orders that could not be sold or filled.
Nvidia's shares fell approximately 6% in after-hours trading.
The benchmarks for the Japanese and Chinese stock markets fell by about 1% on Wednesday. Stocks fell 2.5% in Hong Kong and nearly 2% in Taiwan, the global chip manufacturing hub. Taiwanese semiconductor manufacturers, the manufacturer of most advanced chips around the world, have acquired a lot of business from Nvidia, down 2.5%.
In the US, S&P 500 futures, where investors can bet on how the index works when they open trading in New York, fell by 1%.
On Tuesday, the S&P 500 soaked 0.2%, and the technology-rich NASDAQ also suffered minor losses. Positive quarterly results in the banking sector and indications that the US was making progress in trade deals with the UK helped stabilize the stock on Tuesday.
President Trump's whipping tariff policy remains fostering sentiment in global markets, especially in sectors facing more taxation and potential compromise threats.
A Bank of America study showed that global investors have cut US stock holdings in record numbers over the past two months, and the potential recession spurred by Trump's trade war poses a major risk to the market.
Tripp Mickle Reports of contributions.
