Semiconductor ETFs slide as NVDA & AMD drop
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Semiconductor exchange traded funds have taken a backseat on Thursdayâs trading session after news came out that Nvidia (NVDA) and Advanced Micro Devices (AMD) both confirmed that the U.S. government has curtailed the sale of some of their products to China and Russia.
The U.S. government is worried that the chips created can have applications in artificial intelligence that can be used by either the Chinese or Russian militaries.
As a result, popular chip ETFs like the VanEck Semiconductor ETF (NASDAQ:SMH), iShares Semiconductor ETF (NASDAQ:SOXX), SPDR S&P Semiconductor ETF (NYSEARCA:XSD), Invesco Dynamic Semiconductors ETF (PSI), and Direxion Daily Semiconductor 3x Bull Shares (NYSEARCA:SOXL) have all declined.
The semiconductor segment of the market is now the most significant drag on Wall Street on Thursday as the market segment as a whole is lower by 4.1%.
Daily price action: SMH -4.1%, SOXX -4.2%, XSD -5.5%, PSI -4.7%, SOXL -12.6%, NVDA -10.6%, and AMD -6.5%.
Year-to-date price action: SMH -34.8%, SOXX -35.9%, XSD -34.9%, PSI 37.5%, SOXL -83.1%, NVDA -55.2%, and AMD -47.2%.
"The news comes at an inopportune time given weakness in NVDAâs gaming segment and other macro concerns, and could create other unforeseen impacts at NVDAâs China-based R&D programs (including ramp of next-gen H100 products)," Bank of America wrote in an investor note.