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Why is TQQQ Down Today After AI Chip Restrictions

The ProShares UltraPro QQQ ETF (TQQQ) closed at $82.14 on January 29, 2025, reflecting a 0.62% decline as the Nasdaq 100 index, which it tracks, fell by 0.24% to 21,411.46. The Nasdaq 100 faced pressure primarily due to a significant drop in Nvidia's stock, which plummeted 6% amid reports that the Trump administration is considering expanding AI chip restrictions on sales to China. This potential policy shift has raised concerns about the future revenue of semiconductor companies, particularly Nvidia, which plays a crucial role in AI chip production. The broader market was also influenced by the Federal Reserve's decision to keep interest rates unchanged, with Fed Chair Jerome Powell reiterating the commitment to a 2% inflation goal. This decision, coupled with ongoing U.S.-China tensions, contributed to the subdued performance of tech stocks.