Technology and geopolitical interests collided on Tuesday as Nvidia shares rallied 2.3% in extended trading. The boost came after President Donald Trump confirmed on social media that he would permit the sale of Nvidia’s powerful H200 artificial intelligence chips to specific “approved customers” in China. Trump noted that he had informed Chinese leader Xi Jinping of the decision, stating the reaction was positive. This policy shift is expected to have broad ramifications for the global AI race.
Analysts suggest this move could be a game-changer for China’s technology sector. Julian Evans-Pritchard of Capital Economics noted that access to these chips would allow China to speed up its AI infrastructure buildout, potentially enabling Chinese AI models to match or even overtake frontier U.S. models. The news provided a stark contrast to the broader market sentiment, which was largely negative across Asia and the U.S.
Broader Asian markets mostly fell, unable to find momentum after Wall Street retreated from record highs. Declines were noted in Hong Kong, Shanghai, and Seoul, though Japan’s Nikkei 225 managed a modest 0.2% gain. In Australia, stocks dipped after the central bank held interest rates steady. This caution reflects investor anxiety ahead of the Federal Reserve’s next move, with a rate cut expected on Wednesday to combat a slowing labor market.
Back in the U.S., the S&P 500, Dow, and Nasdaq all closed lower. Beyond the tech sector, a bidding war heated up in the media industry. Paramount announced an all-cash offer for Warner Bros. Discovery, attempting to derail a pending merger with Netflix. The aggressive move sent Warner Bros. Discovery shares up 4.4%, while Netflix slid 3.4% amid concerns over the deal’s future and regulatory scrutiny highlighted by President Trump.
Energy markets remained tepid, with U.S. benchmark crude oil falling to $58.70 per barrel. As investors digest the mix of corporate takeovers, shifting trade policies for tech giants, and looming interest rate decisions, volatility remains the key theme for the week. The focus now shifts squarely to the Fed’s announcement and any updated guidance on the fight against inflation.