Tech and AI stocks fell on Wednesday, leading to a significant drop in the Nasdaq and S&P 500 as investors responded to potential new export controls under the Biden administration and comments about Taiwan by former President Donald Trump. The Dow Jones Industrial Average, which had surged nearly 750 points the previous day, remained flat on Wednesday.
In the afternoon, the Nasdaq dropped 2.79% while the S&P 500 declined by 1.32%. The Dow increased by 0.6% to 41,201.
The downturn for AI stocks began late Tuesday after reports that the Biden administration might implement severe trade restrictions if companies like Tokyo Electron and ASML Holding continue to provide advanced semiconductor technology to China. The foreign direct product rule (FDPR) would significantly tighten the sharing of American technology with foreign entities. This regulation would affect both U.S. and international firms by targeting chips containing any American-made technology components.
Earlier, former President Trump told Bloomberg Businessweek that he believes Taiwan should compensate the U.S. for its defense efforts. He criticized Taiwan for contributing nothing in return and claimed that the island has captured “about 100%” of America’s semiconductor industry. Taiwan’s TSMC, based in Hsinchu, is the largest chip manufacturer globally, producing around 90% of the world’s advanced chips used in items like iPhones and AI models.
Here is the status of major AI stocks on Wednesday afternoon:
– Nvidia: down 7.08%
– Advanced Micro Devices: down 8.48%
– Super Micro Computer: down 6.8%
– Broadcom: down 7.04%
– Micron Technology: down 5.54%
– ASML: down 11.48%
Tokyo Electron shares also fell nearly 11.12%, and TSMC’s Taiwan-listed stock slipped by 6.3%.
Tech stocks were also down as investors continued to offload AI shares. Major tech companies saw declines in the afternoon, with Apple, Meta, Amazon, and Alphabet dropping by 2.6%, 5%, 3%, and 1.6% respectively.
— Rocio Fabbro contributed to this article.