Stocks dropped in early trading Wednesday as shares of chipmakers slid amid concerns about export restrictions to China.
The S&P 500 and tech-heavy Nasdaq Composite were down 0.9% and 1.6%, respectively, about 10 minutes after the opening bell, while the Dow Jones Industrial Average slipped 0.4%. The major indexes closed slightly lower on Tuesday in a relatively calm session after a volatile few weeks of trading fueled by concerns about tariffs and a brewing global trade war, notably growing tensions between the U.S. and China.
Nvidia (NVDA) was leading the move lower this morning, falling more than 5%, as the company announced it would take a $5.5 billion charge after the U.S. limited exports of its AI chips to China. Shares of Advanced Micro Devices (AMD), which reportedly faces similar restrictions, were also down about 5%.
Among other noteworthy movers, ASML Holding (ASML) fell more than 5% after the Dutch manufacturer of semiconductor-producing machinery reported worse-than-expected earnings and issued a soft outlook. Broadcom (AVGO) and Marvell Technology (MRVL) each dropped about 3%, while Micron (MU) declined 2%. The VanEck Semiconductor ETF (SMH) was off more than 3%.
Mega-cap technology stocks were down across the board in early trading. Meta Platforms (META) was down more than 2%, while Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN) and Tesla (TSLA) each dropped more than 1%.
United Airlines (UAL) soared 5% after a strong quarterly earnings report. Shares of other airlines, including Delta (DAL) and American (AAL), were also gaining ground this morning.
Gold futures were up 2.3% at $3,315 an ounce, as the precious metal continues to hit fresh record highs as investors turn to the traditional safe haven amid the uncertainty about tariffs. West Texas Intermediate futures, the U.S. crude oil benchmark, were up 1.1% at $62 per barrel.
The yield on the 10-year Treasury note, which affects borrowing costs on all sorts of loans, notably mortgages, was holding steady at 4.34% this morning. The yield had fallen to below 3.90% earlier this month and rose as high as 4.50% last week as investors reassessed their holdings in U.S. government debt amid the concerns about the potential impact of U.S. trade policy.
Bitcoin was little-changed this morning at around $83,800.
Nvidia to Record $5.5B Charge on China Export Crackdown
36 minutes ago
Nvidia (NVDA) said it expects to take a $5.5 billion charge in its fiscal 2026 first-quarter results after the U.S. limited exports of its artificial intelligence (AI) chips to China.
The news, the latest salvo in an escalating trade war between Washington and Beijing, sent the firm’s shares tumbling more than 5% in early trading.
The company said in a regulatory filing late Tuesday that it was informed by the U.S. government on April 9 that it would be required to have an export license “for the indefinite future” to sell its H20 chips to China. Nvidia said the license requirement is aimed at addressing the risk that the chip would be “used in, or diverted to, a supercomputer in China.” The chip is less powerful than its newer ones and tailored to meet existing export limits for the Chinese market.
Bridget Bennett / Bloomberg / Getty Images
Nvidia’s Q1 results, which are expected May 28, are set to include the $5.5 billion charge “associated with H20 products for inventory, purchase commitments, and related reserves,” it said. According to Morningstar Research, “China has shrunk to about 10% of Nvidia’s revenue from 20%, and we now expect it to go to close to zero.”
The New York Times reported that a spokesman for the U.S. Commerce Department said “that the administration was issuing new export licensing requirements for the Nvidia H20; a chip from Advanced Micro Devices, the MI308; and their equivalents.”
AMD (AMD) shares also were down about 5% this morning.
Major Stock Index Futures Point to Lower Open
1 hr 30 min ago
Futures tied to the Dow Jones Industrial Average were down 0.1%.
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S&P 500 futures slipped 0.7%.
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Nasdaq 100 futures dropped 1.4%.
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