Trump's tariffs: Nvidia falls, dragging down markets
So far this year, Nvidia shares have fallen 23% and this trend could increase.
Nvidia shares plunged this Wednesday after announcing a $5.5 billion charge for complying with Trump's tariff order. This comes amid widespread selling following April 2, when Trump announced the tariffs.
Nvidia's drop (8%) not only represented losses for the company itself, but also caused the Nasdaq stock to fall (2%), the S&P 500 (1.3%), and the Dow Jones Industrial Average (250 points).
Nvidia backs down in response to the president. “The Trump effect in action”
The charge against Nvidia relates to the production of its AI chips called “H20,” which were sold to China. It was revealed that the company earned between $12 billion and $15 billion in profits by 2024.
The stock drop comes two days after Nvidia announced it would build facilities in the United States (Arizona and Texas) for the first time to produce some of its AI chips. The company's decision marked a significant step toward Trump's ultimate goals, which, through these tariffs, aims to bring factories and new jobs to the country. The White House considers this news as “The Trump effect in action”
The collapse of market companies
One of the main competitors is AMD, which also stated that it would be affected by the export control tariffs. The company announced on Monday that it will face US$800 million in charges related to the production of its MI308 GPU chip.
On the other hand, the shares of companies in the same sector also registered significant declines. ASML fell 5%, while Micron, Broadcom, and Marvell each fell 2%. Applied Materials and Lam Research were also the most affected.