Even Nvidia Cannot Escape Bearish Market Triggered by China-U.S. Trade War
Stock market decline is hitting Nvidia this week as trade talks between China and the United States deteriorate.
Quick overview
- The stock market experienced a significant drop today, with Nvidia (NVDA) losing 2.65% after President Trump threatened to increase tariffs on China.
- Nvidia's stock fell to $187 per share amid escalating trade tensions between the U.S. and China, causing major indices like the Dow and Nasdaq to decline.
- Despite concerns about a potential market bubble, Nvidia's CEO remains optimistic about the future of AI in the tech industry.
- The ongoing trade war poses risks for Nvidia, as China encourages local businesses to prioritize domestic AI components over foreign imports.
The stock market plunged today after President Trump issued a threat to China’s government that he would increase tariffs, resulting in a 2.65% stock loss for Nvidia (NVDA).
Nvidia stock fell to $187 per share Friday on the news that a trade war was once again heating up between China and the United States. Trump spoke on Truth Social about drastically increasing Chinese tariffs as the two countries are warring over a number of trade issues.
The three top stock indices all fell on Friday after the news broke with investors scrambling to sell off ahead of perceived losses. The Dow dropped 1% while the Nasdaq lost 2.3%. The S&P 500 fell 1.7% as stocks went into a bearish trend that has affected the crypto market as well. These indices were near record highs before the drop, even though the U.S. dollar’s value has been declining recently and inflation still remains elevated.
Nvidia Not Worried about Market Bubble Bursting
What is ironic is that only this week the CEO of Nvidia Jensen Huang spoke about the potential for a stock market bubble to be created and then burst. He was asked about the risk of AI turning into a fad and bringing down the stock market with it. Huang said that these kinds of comments were wrong because he expected AI to continue to be a dominant force in the tech industry moving forward.
The IMF Bank of England expressed worry that a global economic bubble is forming and then would burst in the near future. Their concern is that enthusiasm for AI could quickly fall off, resulting in a lot of companies left hanging after their hefty AI investments.
Nvidia is the main supplier for AI processing units in the world, and they are expecting the lucrative Chinese market to open up to them even more. But if China is fighting back against the United States and U.S. businesses in a trade war, then Nvidia is a prime target for the country’s ire, especially since China has been trying to encourage its own business owners to buy local AI components rather than bring in foreign ones.
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