Nvidia Faces Challenges Amid Sino-U.S. Trade Tensions

Nvidia faces a turbulent trading period as uncertainty mounts around its China sales due to Sino-U.S. trade tensions. Despite strong forecasts and a buyback plan, the AI chip giant's decision to exclude China from its quarterly forecast has impacted stock performance. Economic indicators hint at potential interest rate changes.

The Nasdaq faced a setback on Thursday due to a decline in Nvidia shares amid ongoing Sino-U.S. trade tensions. Nvidia excluded potential China sales from its quarterly forecast, leading to a 2.6% drop in its shares despite obtaining certain licenses to sell its H20 chips in China.

Concerns arose about Nvidia's data center results and possible reduced spending by cloud providers. The S&P 500 technology sector, which initially showed promise, fell by 0.5%, and the chip index declined 0.2%. However, Nvidia's $60 billion share buyback plan and optimistic comments by CEO Jensen Huang eased some investor worries.

Meanwhile, Snowflake and HP Inc saw gains due to anticipated AI demand. Expectations for a possible Federal Reserve rate cut buoyed the market, despite mixed economic signals. Jobless claims fell, and corporate profits rebounded, but inflation data could affect rate cut expectations.

(With inputs from agencies.)