Semiconductor Stocks Tumble, Wiping Out $100 Billion Amid US-China Trade Tensions: Rocky Start To 2024 – – Benzinga
Following stellar performance in 2023, U.S. semiconductor stocks have taken a hit at the start of 2024, with notable declines in Tuesday morning trading in New York. This downturn comes in the wake of the White House’s directive to a prominent European chipmaker, signaling escalating U.S.-China trade tensions.
What Happened: NVIDIA Corp. NVDA witnessed a decline of 4%, while Advanced Micro Devices Inc. AMD experienced a sharper drop of over 5%. Overall, the largest U.S.-traded 25 semiconductor companies have seen nearly $100 billion erased in market value in just the first trading hours of Tuesday.
As Bloomberg reported, Dutch chipmaker supplier ASML Holdings N.V ASML complied with U.S. President Joe Biden‘s request to halt certain shipments to China weeks ahead of a new export ban’s enforcement.
ASML, Europe's tech giant, confirmed the Dutch government partially revoked licenses for shipping specific lithography systems to China, impacting a few customers. Despite these developments, ASML believes the recent blockade won’t significantly affect its 2023 financial outlook. Shares of ASML Holding N.V. dropped by 4.3%, marking their weakest daily performance since late July.
Why It Matters: In 2023, semiconductor stocks, as tracked by the iShares Semiconductor ETF SOXX, closed with a 66% gain, the best since 2009’s 74% annual increase. Yet the onset of 2024 presents challenges as the market begins to weigh the risks of a potential new tech trade war and its negative influence on the sector’s growth.
Read now: Semiconductor Stocks Soar To All-Time Highs: On Track For Strongest Year Since 2008, But Are They Too Expensive Now?
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