Why Nvidia Stock Is Sinking Today

Nvidia (NASDAQ: NVDA) stock is moving lower in Monday's trading in response to a combination of macroeconomic and business-specific risk factors. The company's share price was down 6% as of 1:45 p.m. while the S&P 500 and Nasdaq Composite were down 3% and 3.5%, respectively.

Stocks are starting this week's trading on a bearish note following recent comments from President Donald Trump about Federal Reserve Chairman Jerome Powell and ongoing escalation in the U.S.-China trade war. In addition to selling pressures impacting the broader market, Nvidia stock is heading lower due to a report that one of its chips will likely be delayed.

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Nvidia stock tumbles amid volatile macroeconomic outlook

Earlier this morning, President Trump made critical comments about Fed Chair Jerome Powell and called for immediate interest rate cuts. The Trump administration is also reportedly looking into whether it's legally able to fire Powell before the end of his term as the central banking authority's leader in 2026. The administration's attempts to shape interest rate policy and legal research into potentially ousting Powell is raising concerns about macroeconomic policy, and causing investors to sell out of stocks, including Nvidia's.

The company's share price is also under pressure following news that China has warned other countries about making trade deals with the U.S. that would harm its interests. Adding another complicating factor, The New York Times published a report on Friday saying that U.S. export bans preventing Nvidia's advanced artificial intelligence (AI) processors from being sold to China could result in Huawei's rise as a global chipmaking leader. The report cited sources including Nvidia CEO Jensen Huang, Wadhwani A.I. director Gregory C. Allen, and SemiAnalysis's chief analyst, Dylan Patel.

More bad news for Nvidia investors?

Meanwhile, on the site semiaccurate.com, Charlie Demerjian published a report today stating that performance problems with one of Nvidia's upcoming chips will cause the product to be delayed. The release of the unnamed chip will reportedly now be pushed months out, and Demerjian says that there is currently no fix for the issues with the processor, and this post has upset investors.

Nvidia still retains a strong lead in the AI processor space, but macroeconomic and geopolitical dynamics are in flux right now -- and significant delays for key releases in the company's product pipeline could weaken the performance outlook this year. While the business's long-term outlook remains very promising, investors should approach the stock with the understanding that there are many potential catalysts that could cause more big swings for the company's share price in the near term.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.