The semiconductor sector suffered as reports emerged that the Trump administration is considering tariffs on semiconductors. This news sent Nvidia’s stock tumbling nearly 3%, triggering a broader selloff in chip stocks and pushing the semiconductor index down almost 2%.
On Monday, the semiconductor index on Wall Street fell 1.82% to 4,924.81 points, slipping below the 5,000-point mark for the first time since October 27.
Nvidia led the decline, with its shares dropping 2.84% to close at $116.66, bringing its market value down to $285.7 billion.
Bloomberg News, citing insider sources, reported that the Trump administration is considering not just country-specific tariffs but also product-specific levies, mainly targeting electronics such as semiconductors and smartphones.
A significant portion of Nvidia’s revenue comes from China, and the company is already under pressure due to the administration’s proposed 10% tariff on Chinese imports.
The impact could be even more severe if additional tariffs are imposed on semiconductors.
Nvidia is particularly vulnerable as it outsources chip production to Taiwan’s TSMC, meaning it could face a double blow if semiconductor tariffs are enacted.
This explains Nvidia’s nearly 3% drop on the day, extending its losses to 15% over the past month.
The selloff wasn’t limited to Nvidia. Rival AMD’s stock slipped 1.45%, while Intel fell 0.26%, Broadcom declined 1.60%, and Taiwan’s TSMC plunged 4.55%.
This widespread downturn in major semiconductor stocks pulled the semiconductor index down nearly 2% by the market close.