Nvidia's stock is facing significant pressure on January 13, 2025, due to a combination of geopolitical and economic factors. The Biden administration's recent announcement of new "AI Diffusion" rules has imposed stringent export restrictions on semiconductor manufacturers, particularly targeting China. This move has raised concerns about Nvidia's ability to maintain its market dominance in AI chip sales, as the restrictions limit access to key international markets. Additionally, the broader tech sector is experiencing a sell-off, exacerbated by rising bond yields, which have reached a 14-month high. This increase in yields is reducing the attractiveness of high-growth tech stocks, including Nvidia, as investors reassess their risk exposure in light of potential interest rate hikes.
Further compounding Nvidia's challenges, HSBC has lowered its price target for the company, citing potential headwinds such as delays in the rollout of its new Blackwell chips and technical issues faced by major clients like Microsoft and Amazon. These factors, combined with the broader market's reaction to a stronger-than-expected U.S. jobs report, have led to increased volatility and selling pressure in the tech sector. The Nasdaq 100 and S&P 500 futures have both declined, reflecting the market's cautious stance ahead of key inflation reports that could influence Federal Reserve policy decisions.
The YieldMax NVDA Option Income Strategy ETF (NVDY) is currently trading at $21.77, down 2.67% from its previous close.