[New York Stock Market Briefing] AI Chip Export Control to China Strengthened, Powell's Warning Causes Tech Stocks to Plunge

S&P500 2.2%·Nasdaq 3.0% Each Plunge

The three major indices of the New York Stock Exchange closed sharply lower. The U.S. government's regulation on the export of Nvidia chips to China and the warning remarks by Jerome Powell, the chairman of the U.S. Federal Reserve (Fed), sharply deteriorated investor sentiment.

On the 16th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 39,669.39, down 699.57 points (1.73%) from the previous trading day.

The S&P500 index, centered on large-cap stocks, fell 120.93 points (2.24%) to 5,275.70, and the Nasdaq index, centered on tech stocks, fell 516.01 points (3.07%) to 16,307.16, respectively.

The previous day, Nvidia revealed in a document submitted to the U.S. Securities and Exchange Commission (SEC) that it had been notified by the U.S. government that it needs permission from the U.S. Department of Commerce to export the low-spec AI semiconductor 'H20' to China. Nvidia expected that this measure would incur an additional cost of about $5.5 billion (about 7.8 trillion won).

In addition, the Trump administration is showing moves to further restrict the export of Nvidia's AI-specific chips to China. On this day, the New York Times reported that the Trump administration is taking crackdown measures against DeepSeek, a Chinese startup receiving Nvidia chips.

Due to this news, Nvidia's stock price closed at $104.49, down 6.87% on the day.

Powell's remarks also contributed to dragging down the index. On this day, Powell warned in a speech at the Economic Club of Chicago, Illinois, that "tariffs are likely to increase inflation risks at least temporarily."

He said, "The level of tariff increases announced by the administration so far is much higher than expected," and "The impact on the economy is likely to be the same, which will include rising inflation and slowing growth."

As the market became unstable, major tech stocks plunged.

In addition to Nvidia, Apple fell 3.89%, Microsoft (MS) 3.66%, Alphabet 2.00%, Amazon 2.93%, Meta 3.68%, and Tesla 4.94%.

Due to the decline, Apple's market capitalization was also calculated to be $2.918 trillion, breaking the $3 trillion market cap again.

Apple, whose market cap fell below $3 trillion last week, seemed to recover after Trump announced a temporary tariff deferral on 20 electronic devices, including smartphones, on the 14th, but the $3 trillion mark broke again in just two days.

Jungdong Noh, Hankyung.com Reporter dong2@hankyung.com