Wall Street opens lower as Nvidia leads decline in tech stocks

Nvidia is pulling Wall Street lower on Wednesday after it said new restrictions on exports to China will chisel billions of dollars off its results.

The S&P 500 was down 0.9 per cent in early trading. The Dow Jones Industrial Average was down 180 points, or 0.4 per cent, as of 9.35am Eastern time, while the slide for Nvidia and other stocks in the chip industry dragged the Nasdaq composite down a market-leading 1.7 per cent.

Nvidia was the single heaviest weight on the market and dropped 5.7 per cent after it said the US government is restricting exports of its H20 chips to China, citing worries that they could be used to build a supercomputer. The limits could shave roughly US$5.5 billion off Nvidia’s results for the first quarter, covering charges related to inventory and purchase commitments.

China and the United States, the world’s two largest economies, have been locked in a trade war and raising tariffs and other impediments to trade between each other. But these restrictions on exports for chips used in artificial-intelligence technology are getting more support from both US political parties, not just President Donald Trump’s.

Senator Elizabeth Warren, a Democrat, asked the US Commerce Department earlier this week “to immediately move forward with restrictions on the export of Nvidia’s H20 and other advanced AI chips” to China, saying they could help enhance its military and surveillance operations.