Markets sink after Nvidia announces $5.5 billion charge to comply with new Trump rule
Stocks sank Wednesday after computer chipmaker Nvidia announced it was recording a $5.5 billion charge to comply with a new Trump administration rule on tech-related exports.
Stocks sank Wednesday after computer chipmaker Nvidia announced it was recording a $5.5 billion charge to comply with a new Trump administration rule on tech-related exports.
Shares of Nvidia fell 6%, causing the tech-heavy Nasdaq fell as much as 2%. The S&P 500 declined as much 1.1%. The Dow Jones Industrial Average fell as much as 0.5% or about 200 points.
Major companies typically record charges for one-time expenses or an expected reduction in earnings. The charge announced by Nvidia relates to a new Trump rule that applies to its H20 chips. Those chips were designed specifically to comply with Biden-era regulations for selling tech products to China. CNBC reported the H20 line generated an estimated $12 billion to $15 billion in revenue in 2024.
In a filing late Tuesday, Nvidia said Trump officials are now requiring a new export license for the H20s to address "the risk that [the chips] may be used in, or diverted to, a supercomputer in China." Nvidia said the administration officials indicating the rule would be in effect “for the indefinite future."
Nvidia, now worth nearly $3 trillion thanks to widespread adoption of its chips by firms looking to boost their artificial intelligence capabilities, has become a bellwether for the broader market.
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