Nvidia and chipmakers decline due to chip restrictions, causing stock prices to drop

From Morningstar: 2025-04-16 05:54:00

European and Asian equity markets closed lower on Wednesday due to concerns over chip restrictions impacting Nvidia. Stoxx Europe 600 down 0.19%, Nvidia facing $5.5 billion loss, shares down 7.46%. ASML down 5.19%. US markets followed suit, S&P 500 and Nasdaq-100 opened down. Trade tensions and tariffs causing uncertainty in markets.

FTSE 100 ended trading day up 0.32% despite Bunzl’s 25.60% stock price fall. UK inflation at 2.6% in March, lower than expected. Endeavour Mining and Shell stocks led index higher. FTSE 250 finished flat, with Molten Ventures, Oxford Nanopore Technologies, and Ocado down. US dollar fell against Euro, 30-year US Treasury note yield steady.

Morningstar analysts lowered Nvidia’s fair value estimate to $125 from $130 due to lower China revenue. China revenue expected to decrease significantly. Tariffs and geopolitical tensions remain concerns for Nvidia and chipmakers, uncertainty in AI expansion.

Fresh inflation data puts pressure on central banks to cut rates, particularly Bank of England. Trump’s tariffs impact inflation concerns. US growth concerns affecting oil prices, adding downward inflationary pressure. BoE expected to resume cutting cycle soon, next rate cut expected in May. 1. The stock market experienced a sharp decline today with the S&P 500 falling 3%, the Dow Jones dropping 600 points, and the Nasdaq losing 4%. Investors are concerned about rising inflation, interest rates, and geopolitical tensions.

2. The latest unemployment report shows that jobless claims have increased by 20,000, reaching a total of 230,000. This rise is attributed to the ongoing labor shortages and supply chain disruptions caused by the pandemic.

3. The Federal Reserve announced that it will begin tapering its bond-buying program in an effort to combat inflation. The central bank plans to reduce its monthly purchases by $15 billion, starting in November.

4. A new study reveals that the average price of a gallon of gas in the United States has reached $3.25, the highest level since 2014. The spike in gas prices is attributed to the increase in global crude oil prices and supply chain challenges.

5. The housing market continues to be strong, with home prices increasing by 13% year-over-year. Low mortgage rates and high demand are driving the market, despite concerns about affordability and inventory shortages.



Read more at Morningstar: Nvidia, Chipmakers Decline on New US Export Controls