Today Taiwan Semiconductor Manufacturing Co (NYSE: TSM) stock opened lower premarket following U.S. President Joe Biden's withdrawal from the 2024 Presidential race. Biden announced his decision through a social media post after a disappointing debate performance and growing pressure from fellow Democrats.
Impact on AI Chip Sector: The broader AI chip sector, led by TSM, Nvidia Corp (NASDAQ: NVDA), and Advanced Micro Devices, Inc (NASDAQ: AMD), experienced a selloff last week. This was triggered by former President Donald Trump's suggestion that Taiwan should compensate the U.S. for its defense efforts, highlighting the absence of a formal defense treaty. Additionally, reports indicated that the U.S. had intensified its semiconductor sanctions against China, a significant market for Nvidia and its peers.
Market Reactions:
SPDR S&P 500 ETF Trust (NYSE: SPY): Lost 2.4% last week.
iShares China Large-Cap ETF (NYSE: FXI): Lost over 4%.
Positive Developments: Despite last week's losses, Nvidia and AMD stocks opened higher on Monday premarket. Nvidia is reportedly developing a new AI chip, named "B20," to comply with U.S. export restrictions for the Chinese market. Nvidia is collaborating with Inspur, a key distribution partner in China, to distribute this new chip, part of the "Blackwell" series.
China's Economic Moves: China, a crucial AI chip market, lowered key interest rates to address economic challenges such as weak growth in the second quarter and looming deflation. The People's Bank of China (PBOC) announced reductions in the seven-day reverse repo rate to 1.7% from 1.8%, the one-year loan prime rate (LPR) to 3.35% from 3.45%, and the five-year LPR to 3.85% from 3.95%.
Stock Price Actions:
Nvidia (NVDA): Up 1.76% at $120 premarket.
Advanced Micro Devices (AMD): Up 1.10% at $153.25 premarket.
Taiwan Semiconductor Manufacturing Co (TSM): Down 1.06% at $164.02 premarket.
Impact on AI Chip Sector: The broader AI chip sector, led by TSM, Nvidia Corp (NASDAQ: NVDA), and Advanced Micro Devices, Inc (NASDAQ: AMD), experienced a selloff last week. This was triggered by former President Donald Trump's suggestion that Taiwan should compensate the U.S. for its defense efforts, highlighting the absence of a formal defense treaty. Additionally, reports indicated that the U.S. had intensified its semiconductor sanctions against China, a significant market for Nvidia and its peers.
Market Reactions:
SPDR S&P 500 ETF Trust (NYSE: SPY): Lost 2.4% last week.
iShares China Large-Cap ETF (NYSE: FXI): Lost over 4%.
Positive Developments: Despite last week's losses, Nvidia and AMD stocks opened higher on Monday premarket. Nvidia is reportedly developing a new AI chip, named "B20," to comply with U.S. export restrictions for the Chinese market. Nvidia is collaborating with Inspur, a key distribution partner in China, to distribute this new chip, part of the "Blackwell" series.
China's Economic Moves: China, a crucial AI chip market, lowered key interest rates to address economic challenges such as weak growth in the second quarter and looming deflation. The People's Bank of China (PBOC) announced reductions in the seven-day reverse repo rate to 1.7% from 1.8%, the one-year loan prime rate (LPR) to 3.35% from 3.45%, and the five-year LPR to 3.85% from 3.95%.
Stock Price Actions:
Nvidia (NVDA): Up 1.76% at $120 premarket.
Advanced Micro Devices (AMD): Up 1.10% at $153.25 premarket.
Taiwan Semiconductor Manufacturing Co (TSM): Down 1.06% at $164.02 premarket.