Semiconductor Stocks Under Pressure: Trade War Fallout Deepens

$NVIDIA( $NVIDIA(NVDA)$ )$ $AMD( $Advanced Micro Devices(AMD)$ )$ $S&P 500(. $S&P 500(.SPX)$ )$ $NASDAQ Composite(. $NASDAQ(.IXIC)$ )$

It’s April 18, 2025, at 8:54 PM PDT, and the stock market is feeling the heat from an escalating U.S.-China trade war, with semiconductor stocks taking a particularly hard hit. The S&P 500 is down 2.5% week-to-date at 4,780, while the Nasdaq Composite, heavily weighted toward tech, has slumped 3.8% to 15,100. Recent U.S. restrictions on chip exports to China have sent shockwaves through the sector, with NVIDIA (NVDA) and AMD (AMD) leading the decline. This post delivers a precise, insightful, current, and knowledgeable breakdown of the semiconductor slump, its broader market impact, and what traders can do next.

Trade War Escalates: Semiconductors in the Crosshairs

The U.S.-China trade conflict has intensified, with the White House imposing new export controls on advanced semiconductor chips. This follows a series of tariff hikes, including a 104% duty on certain Chinese imports, as part of President Trump’s “reciprocal” trade strategy. The latest restrictions require companies like NVIDIA to obtain special licenses for exporting chips like the H20—designed for the Chinese market—a process analysts describe as a de facto ban since no such licenses have been granted.

• NVIDIA’s Hit: NVIDIA disclosed a $5.5 billion revenue loss due to the export curbs, sending its stock down 7% on April 16. The company’s chips are critical for AI applications, and fears of China developing its own alternatives are growing.

• AMD Follows: AMD dropped 5% this week, dragged down by similar concerns over its China exposure and a broader tech rout.

• Macro Impact: The Nasdaq’s 3.8% weekly decline reflects the sector’s outsized influence, with tech accounting for nearly 30% of the S&P 500’s market cap.

The trade war isn’t just a semiconductor story—posts on X highlight broader market anxiety, with some users comparing the current S&P 500 drawdown to historic crashes like March 2020. While that sentiment may be overblown, the uncertainty is real, and the World Trade Organization projects a 0.2% decline in global merchandise trade volume for 2025 due to tariffs.

Semiconductor Stocks: Performance Snapshot

Here’s how key semiconductor players and indices performed as of April 17, 2025:

• Tech’s Weight: NVIDIA and AMD’s YTD losses of 15% and 12% are outpacing the S&P 500’s 9.5% decline, signaling sector-specific pain.

• Broader Impact: The Nasdaq’s 13% YTD drop underscores tech’s vulnerability to trade disruptions, with semiconductors at the epicenter.

Visualizing the Tech Tumble:

parallel decline in the Nasdaq and NVIDIA, driven by trade war fallout

Bull vs. Bear: Can Semiconductors Recover?

Bull Case

• Long-Term Demand: AI and cloud computing demand remain strong—NVIDIA’s core growth drivers are intact despite China’s headwinds.

• Policy Relief: If U.S.-China trade talks (slated for next week) yield exemptions, semiconductor stocks could rebound 10-15%.

• Valuation Appeal: NVIDIA’s forward P/E has dropped to 35x from 50x earlier this year, tempting value hunters.

Bear Case

• Trade War Drag: Ongoing restrictions could cost NVIDIA and AMD billions more, with China accelerating its domestic chip production.

• Market Sentiment: The Nasdaq’s 13% YTD loss and a VIX at 34 signal risk-off behavior—tech may stay under pressure.

• Earnings Risk: NVIDIA’s Q1 earnings (April 23) could disappoint if China’s revenue hit is worse than expected.

My Take: Semiconductors face near-term pain, but their long-term growth story isn’t broken. I’d wait for a better entry point after earnings clarity.

Trading Strategy: Navigate the Storm

• NVIDIA (NVDA): Hold off for now—buy at $450, stop at $430, target $500. Wait for earnings or trade talk progress.

• AMD (AMD): Short at $120, cover at $110, stop at $125. Downtrend likely to continue near-term.

• Hedge: Buy SPY $475 puts to protect against a broader tech sell-off if the Nasdaq breaks below 15,000.

My Plan: I’m sitting tight with 70% cash, waiting for NVIDIA to hit $450 post-earnings, and shorting AMD for a quick 8% move. I’ll hedge with SPY puts given the market’s shaky footing.

Risks to Watch

• Trade Talks: A breakdown in U.S.-China negotiations could deepen the semiconductor rout.

• Earnings Season: Weak guidance from NVIDIA or AMD could trigger another 5-10% drop.

• Fed Policy: A hawkish Fed stance (rate hike odds at 60% for May) could further pressure growth stocks.

What’s Your Play?

Semiconductors are getting hammered, but opportunities lurk in the chaos. Are you buying the NVIDIA dip, shorting AMD, or staying on the sidelines? Drop your thoughts and trades below—let’s tackle this trade war fallout together!

📢 Like, repost, and follow for daily updates on market trends and stock insights.

📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

📌@Daily_Discussion @Tiger_comments @TigerStars @TigerEvents @TigerWire