Investing.com -- Semiconductor stocks are feeling Monday the pinch as escalating trade tensions sent uncertainty through global markets after U.S. President Donald Trump hit Mexico, Canada and China with steep tariffs.
Several major players in the chip industry have seen their stock prices decline in premarket trading, reflecting investor concerns over the impact of new tariffs.
Nvidia (NASDAQ:NVDA) is down over 2%, while AMD (NASDAQ:AMD) has fallen by 1.6%. Broadcom (NASDAQ:AVGO) and Qualcomm (NASDAQ:QCOM) are also experiencing declines, with each dropping around 2% and 1.9% respectively.
Texas Instruments (NASDAQ:TXN) and Intel (NASDAQ:INTC) are both down 1.4%. Internationally, Taiwan Semiconductor Manufacturing Company (TSMC), a crucial supplier to many tech giants, has seen a 2.6% decrease. ASML (AS:ASML), a key provider of equipment to chip manufacturers, is also down by 2%, while Arm has fallen by 3%. The iShares Semiconductor ETF (SOXX) has declined 2.2%
The President has also indicated that tariffs on the European Union are likely. These moves have heightened fears of a broader trade war and its potential to disrupt supply chains and dampen global economic growth.
The semiconductor industry is particularly sensitive to trade disputes due to its interconnected global nature.
Components often cross borders multiple times during the manufacturing process, making them vulnerable to tariffs at each stage. The prospect of increased costs and logistical challenges is weighing on investor sentiment, leading to the sell-off in chip stocks and the broader market.