Nvidia Loses $112 Billion in a Single Day Amid Political and Economic Turmoil

U.S. chipmaking giant Nvidia has suffered an unprecedented market loss of approximately $1.3 trillion since last November, bringing its market capitalization down to $2.36 trillion. The drop comes as trade tensions between the U.S. and China intensify, compounded by sharp criticism from President Donald Trump toward Federal Reserve Chairman Jerome Powell

These losses are attributed to several intertwined factors

·   U.S. Export Restrictions on Chips: Nvidia recently projected $5.5 billion in losses for Q1 2025 due to new U.S. export controls on advanced AI chips destined for China, severely impacting the company’s revenue outlook

·   Escalating Trade Tensions: The renewed U.S.-China trade war has fueled market uncertainty, especially after China warned against entering broad economic agreements with Washington that compromise its national interests

·   Trump’s Attacks on Powell: President Trump called Fed Chair Powell a “major loser,” demanding an immediate rate cut—an attack that raised investor concerns about the Federal Reserve’s independence and contributed to a loss of market confidence

Broader Market Fallout Amid Rising Trade Risks

These factors collectively triggered a sharp decline in U.S. stock markets. The Dow Jones Industrial Average fell by 2.48%, the Nasdaq Composite by 2.55%, and the S&P 500 by 2.36%

Major tech stocks, known as the "Magnificent Seven," also suffered steep declines. Tesla dropped by 5.8%, Amazon by 3%, and Meta by 3%, increasing downward pressure across the board

A Clouded Outlook for Markets

In light of these developments, investors face growing uncertainty over Nvidia’s trajectory and the broader tech sector. Financial markets are expected to remain volatile as geopolitical tensions persist and political pressure mounts on the Federal Reserve

Eyes now turn to future policy decisions from the U.S. administration and market reactions, amid fears that sustained tensions could destabilize global financial systems