Nvidia experienced a significant stock decline, losing over 7% on Monday, as the company grapples with disappointing earnings and international scrutiny. The tech giant broke through a crucial support range that had been in place since January 2024, marking a critical shift in its market position. Meanwhile, the broader market faced uncertainties as President Donald Trump considered altering tariffs on Canada, Mexico, and China. This economic climate has contributed to fluctuations in major indices, with the Dow Jones Industrial Average dropping 1% and the NASDAQ reversing by as much as 1.6%.
The market anxiously awaits Trump's decision on tariffs set to be enforced on Tuesday. Last month, Trump postponed the 25% tariffs on Mexico and Canada, but they are scheduled to be implemented on March 4. Observers are speculating potential changes to these tariffs, which could significantly impact trade relations and market dynamics.
In the currency market, the AUD/USD managed a minor recovery on Monday, retesting the 0.6250 zone after six consecutive days of losses. This recovery occurred amidst a sharp pullback in the US Dollar and anticipation of the Reserve Bank of Australia's upcoming minutes release.
Nvidia's stock downturn is part of a broader industry trend. The company's Q4 earnings report last Wednesday failed to meet market expectations, leading to a series of lower highs in its stock performance. The market's reaction reflects concerns over Nvidia's future outlook despite its recent quarterly results.
Adding to Nvidia's challenges, the US government has imposed export restrictions on the company's Blackwell chips to China. Further complicating matters, investigations have emerged involving Malaysian companies allegedly selling Blackwell chipsets to DeepSeek, a competitor in the generative AI sector.
These investigations have drawn US officials' attention to transactions involving Super Micro Computer and Dell Technologies, which reportedly sold servers containing Blackwell chipsets to a Singapore-based company. The inquiry began following Singapore's arrest of three individuals linked to these activities, heightening concerns over potential resales of Nvidia chips to Chinese buyers.