Why Nvidia Stock Is Nose-Diving Today

Core Viewpoint - Nvidia's stock is experiencing a significant decline due to President Trump's tariffs, which have triggered a sell-off in semiconductor stocks, impacting Nvidia directly [1][2]. Group 1: Stock Performance - Nvidia's shares dropped by 7.8% as of 1:30 p.m. ET, with a peak decline of 9.5% earlier in the day [1]. - The broader market, including the S&P 500 and Nasdaq Composite, also faced losses of 4.9% and 5.1%, respectively [1]. Group 2: Tariff Impact - President Trump's announcement of extensive tariffs has initiated a trade war, leading to a heavy response from China [2]. - Although there was initial hope for Nvidia due to a temporary exemption for raw semiconductors, China's retaliation makes it likely that this exemption will not be maintained [2][3]. - The exemption, even if it remains, only applies to the chips and not to other supply chain components, such as servers containing Nvidia's chips [3]. Group 3: Competitive Landscape - Nvidia holds a significant market share in China, and the increased costs due to tariffs will hinder its competitiveness against domestic producers [3]. - The dual-direction tariffs will materially affect Nvidia and other semiconductor manufacturers [3]. Group 4: Investment Outlook - Despite a long-term bullish outlook on Nvidia, the current uncertainties suggest a cautious approach to further investments until the situation stabilizes [4].