Stock markets saw a decline on Wednesday due to concerns over the global trade war affecting major technology companies. Nvidia, a leading American semiconductor company, announced that the U.S. government had imposed restrictions on its ability to sell certain chips to China without a license.
This marks the first significant restriction on semiconductor exports under the Trump administration. Nvidia, which holds a dominant position in the market for chips used in artificial intelligence (AI) systems, will now need a special license to sell these chips to China. In a filing on Tuesday, the company stated that it expected a $5.5 billion loss due to unsold chips and unfulfilled orders. As a result, Nvidia’s stock fell approximately 6% in after-hours trading.
In Europe, the situation was also concerning. ASML, a Dutch company that manufactures machines essential for producing advanced semiconductors, saw its stock drop by over 6%. ASML’s CEO, Christophe Fouquet, cited the uncertainty caused by the U.S. tariffs as a factor in the decline. The Stoxx Europe 600 index dropped by about 1%, with most markets in the region experiencing losses.
In Asia, stock markets followed suit. Japan’s benchmark index fell by 1%, while shares in Hong Kong and Taiwan dropped by 2%. Taiwan Semiconductor Manufacturing Company (TSMC), a key player in the semiconductor industry and a major supplier for Nvidia, saw its stock drop by 2.5%. Meanwhile, South Korea’s Samsung and SK Hynix each saw a 3% decline in their share prices.
In the U.S., stock futures for the S&P 500 fell by more than 1%. On Tuesday, both the S&P 500 and the tech-heavy Nasdaq showed slight losses, despite better-than-expected earnings reports from major banks and positive signs regarding trade talks with Britain.
The uncertainty surrounding Trump’s tariff policies continues to affect market sentiment, especially in industries that may face more tariffs or potential changes to existing policies. A recent survey from Bank of America revealed that global investors have significantly reduced their holdings of U.S. stocks in the past two months. The ongoing trade conflict with China is seen as a potential cause of a global recession, adding to the market’s concerns.
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