After days of teasing a major announcement, US President Trump announced he will sign an executive order mandating that Americans pay no more for prescription drugs than citizens in the countries with the lowest prices. He claimed this could cut US drug costs by up to 80%.
The initial announcement triggered a global selloff in pharmaceutical stocks. However, shares rebounded as details clarified the plan targets pricing gaps between countries, particularly in Europe, rather than directly cutting into pharma company profits.

Markets: Pharma stocks recovered yesterday and could even benefit from the broader risk-on sentiment, trading largely sideways today. In contrast, cryptos lose ground, as speculations and hopes that Trump’s big announcement could count for this sector quickly faded.

My view: The market remains highly news-driven. I continue to view the pharma sector positively due to its defensive characteristics. However, given lingering uncertainties and the potential impact of further policy details, I remain cautious. I’m maintaining a core allocation but, after the recent rally, I prefer to wait before increasing exposure.

The US and China have agreed to slash reciprocal tariffs from 125% to 10% for a period of 90 days, marking a major breakthrough in trade negotiations. The agreement was reached after high-level talks in Switzerland over the weekend. However, the US will maintain its separate 20% tariff on Chinese fentanyl-related imports, leaving China with an effective total tariff burden of 30%.

Markets: Markets responded with a euphoric move; US interest rates climbed alongside the US dollar, while gold took a hit and crypto prices fell sharply

My view: This deal came together surprisingly quickly after latest confrontation and is a step in the right direction, but it is far from a final resolution. The 90-day truce is temporary, and underlying structural issues remain unresolved. Policies have already changed several times and could shift again just as fast. Despite the market’s euphoric reaction, I see no reason yet to shift into a risk-on stance. Corporates have already taken damage amid prolonged uncertainty. Markets have already rebounded strongly, even surpassing pre-Liberation Day levels. I continue to follow developments closely and will reassess positioning as the situation evolves.

China’s exports rose by 8.1% year-over-year in April (in USD terms), significantly surpassing the consensus forecast of 1.9%. The upside surprise was driven by strong shipments to Southeast Asia and Europe, which surged by 21% and 8% respectively.

In contrast, exports to the US slumped by 21% as newly imposed tariffs began to take effect, according to customs data released today.

On the import side, volumes edged down just 0.2%, beating expectations for a much steeper 5.9% drop, suggesting a more resilient domestic demand than anticipated.

Meanwhile, US and Chinese trade officials are set to meet this weekend in Switzerland to explore options for de-escalating the ongoing trade conflict.

Markets: China stock indices were slightly positive this morning following the numbers’ release.

My view: Overall, I remain constructive on China. At this stage, it’s not surprising that the stronger-than-expected economic data has had limited impact on markets. Investor sentiment remains cautious, with most participants in a wait-and-see mode as the outcome of the trade conflict between the two largest global economies remains uncertain.

My portfolio maintains a significant allocation to Chinese equities, although I trimmed exposure slightly ahead of the sharp market correction in early April. Since then, I share the prevailing waiting stance, expecting a more favorable re-entry point going forward.

…between US and UK. US President Donald Trump unveiled a trade agreement this afternoon. The deal with the UK ist the first the US with a country whose imports were subject to new reciprocal tariffs imposed by Trump in early April. Many specifics about the deal were not immediately clear. Trump said, the deal includes “billions of dollars of increased market access for American exports,” and that the UK will “reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products.” The final details will be written in the coming weeks.

Key Provisions of the Agreement:

• Tariff Reductions on UK Exports:
  The US will reduce tariffs on British car imports from 27.5% to 10% for up to 100’000 vehicles annually and any additional vehicles face 25% rates. Furthermore, tariffs on UK steel and aluminum exports to the US will be eliminated, providing relief to these sectors.

• Increased US Market Access: The UK will lower its average tariff on US goods from 5.1% to 1.8%, enhancing access for American products, including beef, ethanol, chemicals, and machinery.

According to Trump, there should be more deals in the pipeline. A US delegation is traveling to Switzerland on coming weekend and will meet officials from China. Trump made also clear that 10% US tariffs is the minimum and a low number “Some will be much higher because they have massive trade surpluses.”

Before the announcement, early in the afternoon, the Bank of England (BoE) cut interest rates by 25bps to 4.25% as widely expected.

Markets: US stock indices gained while UK index FTSE 100 closed negative. US dollar gained together with US interest rates as well as the pound and UK interest rates. Cryptos saw a strong bounce with bitcoin again above USD 100’000 price level.

My view: The US President Donald Trump calls it a first “great” deal with a country previously subject to reciprocal tariffs. However, the 10% tariffs imposed on the UK during the so-called “Liberation Day” remain largely in place, with only a few categories exempted or subject reduced rates.

It took more than a month to finalize this agreement. On first side, a short time period for such a major trade deal. However, negotiations having been ongoing for several years.
Without more specific details, it is difficult to assess the broader economic or market implications. My initial reaction during the press conference was one of skepticism: where exactly is the “greatness” of this deal, and what is supposed to change. Particularly for financial markets or the many corporates in countries still left without any trade agreement?

Perhaps there is slightly less uncertainty now, and at least we have a rough framework that offers some insight into how future deals might be structured.

That is why I don’t share the current market euphoria, as I see clear signs of economic strain unfolding in the short to medium term.

As expected, the US central bank Fed holds interest rates steady at a range of 4.25% to 4.5% for the third straight meeting. Jerome Powell mentioned that the “uncertainty about the path of the economy is extremely elevated and that the downside risks have increased. The central bank also noted in its statement that the risk of higher unemployment and higher inflation has risen.
Jerome Powell further mentions that the central bank is not in hurry to cut interest rates and could wait and see the impacts of tariffs to the economy.

Following the Fed Press Conference, a report is saying that Trumps will end chip export restrictions (not confirmed by now). The chip restrictions wer scheduled to take effect on May 15.
Earlier, President Donald Trump said to reporters that he would not lower tariffs on China as a condition to begin trade talks. This morning both sides, the US and China, announced trade talks starting coming Saturday.

Markets: In a volatile trading US markets closed higher, interest rates down with the 10-year yield at 4.27%, gold price drops together with the oil price (-2%) while US dollar gets stronger

My view: Markets initially rose in early trading following the announcement of US-China trade talks. However, they turned negative after the Fed's statement, before rebounding into positive territory on news of a potential lift on chip export restrictions.

At this stage, investors appear to be trading on rumors rather than facts. In speculative periods, such a regime can persist longer than expected. However, it may ultimately come to an abrupt and sharp end. The question is, how many warning signals investors are going to ignore. The damage of the economy is real, with corporates reduced or even stopped investing already at the time of rising uncertainties around tariffs, even before the official announcement with the tariff board on April 2.

At this stage, investors seem to be trading on rumors rather than facts. In speculative environments, such a regime can persist longer than expected. However, it may ultimately come to an abrupt and sharp end. The real question is: how many warning signs will investors continue to ignore? The economic damage is already evident. Many corporations had scaled back or even halted investments amid growing uncertainty around tariffs, well before the official announcement by the tariff board on April 2.
In contrast to the COVID pandemic, when corporations swiftly ramped up production backed by substantial government stimulus, today’s environment offers no such support. Instead, companies face persistent uncertainty, with no clear path forward.

This is exactly why, in my view, the recent V-shaped rebound is difficult to justify.

Yesterday, Friedrich Merz was elected as Germany’s new Chancellor. The initial vote in the Bundestag failed. Merz could only secure the position in a second round of voting later that day. Germany’s federal election was held back on February 23. Subsequent negotiations led to a coalition agreement between the CDU/CSU and the center-left Social Democratic Party (SPD), which was signed on May 5.

Markets: DAX index took a hit, could recover from a 2% loss and is trading sideways today. Interest rates remained unchanged while the Euro regained some lost ground.

My view: As previously noted in several comments, I do not share the prevailing optimism surrounding Germany’s current path. A closer look at the political landscape reveals a fragile foundation for such confidence. The country's governance structure appears weak at its core, with many politicians still engaged in tactical maneuvering rather than addressing the pressing structural challenges facing the nation.

The new coalition government has outlined priorities including economic revitalization, increased defense spending, stricter migration policies, and long-overdue administrative modernization. A notable step has been the passage of legislation easing Germany’s constitutional debt restrictions to enable greater military investment.
However, these policy efforts are already being undermined by internal divisions within the coalition and the growing influence of the far-right AfD party. This dynamic raises serious concerns about the coalition’s stability and its ability to implement its agenda effectively in the near term.

While certain economic indicators have rebounded slightly from recent lows, the broader outlook remains subdued. Structural headwinds continue to weigh on growth prospects.

German blue chip stocks are currently trading near their all-time highs reflecting strong investor sentiment. Much of the recent strength in German equities appears driven by capital flows shifting out of the US and back into Europe, particularly into German names. This has also provided support for Germany’s small & mid Cap indices despite underlying economic concerns.

German small and mid caps had previously been among my most favored segments for building a position. However, I got surprised by the time and strength of this year’s rally, particularly its resilience following US President Donald Trump’s so-called 'Liberation Day'. We saw stock indices rebound in a sharp V-shaped pattern.
They have now fallen off that list. Persistent structural headwinds facing Germany—combined with valuations that no longer appear compelling, have led me to adopt a more cautious stance.

A busy week ahead for markets with earnings season to continue and potential news on tariffs:
- Fed decision on interest rates on Wednesday.
- OPEC+ decided to rise oil output
- Tariff announced for the movie industry, could impact Netflix.
- Trump says announcing tariffs for pharmaceuticals over the next 2 weeks.
- Tariffs on auto parts are now in effect - Ford suspends guidance for 2025 amid USD 2.5billion tariff impact

Markets: Asian markets closed this Monday, Europe indices up while the US stocks dropped together with cryptos, oil and US dollar currency while gold regained the level of USD 3’300.

My view: After the recent record winning streak, single stocks and overall markets can react very vulnerable to any news. The investor sentiment index turned to “greed” from “extreme fear” in only few days after remaining a record time period in the “extreme fear” area, back since end of February.
The market does not expect any rate cut. I share this view as the US central bank has no rush and big reason to lower rates even with mounting pressure coming from the White House.

Warren Buffett, the 94-year-old “Oracle of Omaha,” announced he will step down as CEO of Berkshire Hathaway by the end of this year. The decision was shared during the company’s annual shareholder meeting yesterday, marking the end of an era for one of the most iconic investors in history.

In the first quarter, Berkshire Hathaway reported a sharper-than-expected decline in operating earnings, reflecting ongoing market challenges. Buffett highlighted growing concerns over global trade tensions. “Trade should not be a weapon” and called it a “big mistake”. Buffet expects that tariff turmoils will weigh in and stressed the importance of patience in uncertain times -“You have to be patient”.

Berkshire’s cash hoard ballooned to a fresh record during the first quarter, showing that Buffett did not use the first-quarter drop in the stock market to deploy the money. In fact, Berkshire was a net seller of stocks for a 10th quarter in a row.Despite a volatile market in the first quarter, Buffett refrained from major stock purchases. Instead, Berkshire’s cash reserves swelled to a record high, underlining the company’s cautious stance. Notably, Berkshire was a net seller of equities for the 10th consecutive quarter.

Markets: -

My view: Warren Buffet’s remarks on trade and caution in the current environment strongly resonate with me. I also did not see the latest market dip as a buying opportunity and have remained on the cautious side. The sharp rebound we saw during the last week felt too fast, too far, and in my opinion, does not reflect the high number of unresolved uncertainties, from geopolitical tensions to economic risks through trade tensions.

China said it is evaluating the possibility of starting trade negotiations with the US. Chinese authorities reiterated that the US must remove all unilateral tariffs as a gesture of sincerity to create the conditions for meaningful dialogue.

On the macro front, the US nonfarm payrolls for April surprised to the upside, with 177’000 jobs added (est. 140’000).

Markets: Major stock market indices extend their gains, US dollar down while US 10-year yield is up and back at 4.3% level, cryptos with an upbeat move, Bitcoin price takes direction back to USD 100’000.

My view: The buy the dip dynamic continues. The S&P 500 index is on the way for a 9 day winning streak, longest since 20 years.

The "buy-the-dip" dynamic remains firmly in play, with the S&P 500 on track for a nine-day winning streak, its longest in over two decades.

I did not count with such a strong move, especially given the growing list of macro uncertainties and early signs of economic softening. Despite the momentum, I remain cautious and keep my portfolio allocation unchanged, as I still see a higher probability for renewed downside pressure ahead.

Microsoft and Meta both reported stronger-than-expected earnings after the market closed yesterday, providing a continued boost to market sentiment. Microsoft posted revenue of USD 61.9 billion for the quarter, up 17% year-over-year, driven by strong growth in its cloud segment. Meta reported USD 36.5 billion in revenue, a 27% increase year-over-year, and issued an upbeat outlook, helping offset concerns over rising capital expenditures.

On the macro side, latest US labor market data show the first signs of potential softening. The ADP Employment Change report showed private sector job additions of 62’000 in April, slightly below expectations of 115’000 and down from the downwardly revised 147’000 in March.
Weekly jobless claims rose to 241’000, up from 223’000 the prior week, more than the expected 225’000.

Markets: US Futures with a strong bounce, most European markest closed with Labor Day. Cryptos gain with risk on sentiment. Gold down 2% while US dollar regains some ground.

My view: The market is showing clear signs of “FOMO”, fear of missing out, especially evident in the strong post-earnings reaction of Microsoft and Meta. Both companies exceeded expectations, lifting Nasdaq Futures by nearly 2% overnight. Microsoft surged by 10%, pulling sentiment higher and fueling hopes among some investors that markets could “go to the moon.”

However, it's important to remember that Q1 earnings are backward-looking. The first tariff concerns emerged in March, with formal announcements coming in early April. The true impact of these trade disruptions will likely become clearer in Q2 results.

On the macro side, early signs of weakness are emerging. Recent consumer data and labor market indicators, including this week’s ADP employment and jobless claims, suggest a potential cooling in momentum.
Recent earnings from McDonald's highlight a cautious consumer environment. The company reported a decline in US same-store sales, marking its first drop since the early stages of the Covid pandemic.
From this point of view, it warrants a more cautious stance.

In such a wave of FOMO, the market rally may continue in the short term. With uncertainties remaining, volatility remains high, and in my view, downside risks are far from off the table.

The US economy contracted for the first time in three years. In the first three months of 2025, the GDP falls 0.3% in Q1 2025 amid policy uncertainty weighed on businesses. Analysts expected a growth rate of 0.4%.

Markets: US Futures down with Nasdaq Futures down 2%, US 10-year yield is higher, US dollar down, gold price up

My view: Markets could see a rough trading day after this set of data. As I highlighted during the recent weeks already, the recession scenario becomes more realistic as Q1 already saw a surprising contraction. This could be a turning point after the recent risk on sentiment.

My portfolio allocation is already positioned for such a scenario, which is why I am not making any adjustments at this stage.

The Eurozone economy grew by a stronger-than-expected 0.4% in the first quarter 2025. Economists polled had forecast a 0.2% expansion. Figures published earlier this morning the GDP of Europe’s largest economy, Germany, grew 0.2% over the same period while French GDP added 0.1%. Southern European and smaller economies outperformed.

Alongside the stronger-than-expected economic growth data, Q1 corporate earnings have been largely solid, with several companies even delivering upside surprises. However, forward guidance often reflects elevated uncertainty amid rising macroeconomic and geopolitical risks.

Markets: Equity indices in Europe see another positive day, gold with some profit taking and prices falling below USD 3’300, oil fell below USD 60 (WTI), US dollar and cryptos trading sideways while interest rates are lower.

My view: It is possible that Q1 was supported by front-loaded orders executed ahead of looming tariff hikes. While these backward-looking figures paint a seemingly strong picture, the outlook appears far less reassuring. Leading indicators increasingly signal a potential contraction, and corporate guidance is often marked by caution and uncertainty.

Equity markets continue to surprise me. I do not share the current risk-on sentiment.

Cargo shipments from China to the US have plummeted dramatically since the Trump administration raised tariffs to 145% in early April. Americans have not yet felt the full impact of this sharp reduction in goods from one of the country’s largest trading partners.

Markets: During recent days, major equity indices are about to recover from recent sell-off, US 10-year yield dropped to almost 4.2%, gold price is again above USD 3’300, Cryptos slightly gave up some of the recent gains together with the US dollar.

My view: 60% slump in shipping. Reading such a headline and seeing this number, some red lights start flashing.
Indications from the supply chain and freight markets should be taken seriously. They often signal shifts in the global economy long before financial markets react.

I bet very few of today’s financial influencers have truly experienced a situation like this firsthand, a drastic supply chain shock. I can still picture it vividly from 2008.
At the time, I had the opportunity to work in Singapore on a short-term development assignment for one of the major Swiss banks. It was late 2008, right in the middle of the financial crisis, shortly after the collapse of Lehman Brothers.

Living and working in Singapore, I initially observed huge freight ships, fully loaded with containers, steadily heading toward Europe. But by December, the scene had changed dramatically: Singapore was suddenly empty of many expats, and only a handful of container ships remained, most of them looking eerily empty.
Having never experienced such an economic shock in real life before, nevertheless, I remained somewhat optimistic about the global economy and financial markets back then.
Looking back now, I understand the true significance of container ships no longer sailing, or doing so half-empty.

Today, financial markets are not properly pricing in such a scenario, even though the data clearly indicates it could be happening again. That is why I simply cannot share the current wave of optimism or the prevailing “risk-on” attitude in today’s trading environment.

Tariffs remain a major topic. Rumors of breakthroughs have been denied, and trade tensions are already impacting some supply chains. Early indicators show a marked slowdown in shipments from China to the US. Some retailers have issued warnings that this could lead to shortages of goods. Meanwhile, several factories in China have halted production and sent workers home as the effects of US tariffs take hold. In response, China has announced additional economic support measures and is planning further aid for companies struggling with the external shock.

On the corporate front, this week marks the busiest stretch of the earnings season. Four of the so-called "Magnificent Seven", Apple, Amazon, Microsoft, and Meta, along with many other major firms, are scheduled to release their quarterly reports.

Markets: Nasdaq Futures slightly down, gold fell below USD 3’300, US dollar is consolidating after recent losses, US interest rates trading sideways with the 10-year yield between 4.25 to 4.3%, European and Asian indices mostly higher. Cryptos reflect risk on stance with prices increasing.

My view: Investor sentiment has shifted to a risk-on stance, pushing markets higher over the past few days. However, the upside appears limited, with risks still skewed to the downside in my view. Supply chains are already feeling the impact, and uncertainties for corporates persist, as current tariff suspensions are only in place until the end of July, with no trade deal yet in sight.

Tariffs are likely to remain, as President Trump appears determined to generate additional revenue. His preference for high tariffs constrains potential market gains, as elevated tariffs are expected to slow global growth and drive up prices, ultimately weighing on consumer demand.

The tech rally continues following a series of earnings reports. After the market closed yesterday, Google reported first-quarter results, with earnings reaching USD 34.5 billion, up 46% year-over-year. A significant contributor to this surge was USD 11.2 billion in "other income," representing a 293% increase from the prior year. This figure was notably driven by USD 8 billion in unrealized gains from the company’s investment in a private company.

The previous evening, Texas Instruments and ServiceNow also fueled optimism in the tech sector with solid earnings and upbeat commentary. Their outlooks offered no indication of weakening demand.

Markets: Nasdaq back in the leading, up three consecutive days, closing 2.8% higher last night and up 0.5% in the futures trading this morning. Interest rates, gold and the US dollar, all are taking a breather from their recent trends.

My view: Individual corporate earnings continue to be the primary driver of market gains. However, I remain doubtful that this rally has much further to run, unless we see unexpectedly positive economic data or real progress in trade negotiations that could lead to a preliminary agreement. The news flow on this front remains inconsistent: while US officials frequently reference ongoing talks with China, Beijing denies any substantial engagement.
Meanwhile, this week has been relatively quiet in terms of economic releases. Later today, the consumer sentiment index may shed some light on the stability of consumer spending and broader demand trends.

Tensions between Donald Trump and the US central bank ease. Donald Trump said that he has no plans to fire Federal Reserve Chairman Jerome Powell. Before US President Donald Trump called Powell “Mr. Too Late” and “a major loser” for not cutting interest rates.

Markets: Major Equity indices in green across the globe. Bitcoin saw a rally from USD 83’ to almost 95’000 within two days, gold is taking hit with profit taking, US 10-year yield back below 4.35%, while US dollar stabilizes after recent drop.

My view: At this point, buying equities feels more like a bet on hope and speculation than a decision grounded in fundamentals. With the latest correction, some stock prices may appear cheap now, but given the elevated valuations we have recently seen at market tops, there is still ample room for downside, especially in case a recession materializes, tariff issues remain unsolved, or new disruptive factors emerge.

The latest leading indicators published this morning for Europe suggest a less optimistic economic outlook. Until now, the service sector has been relatively resilient, but the most recent April PMI (Purchasing Managers' Index) points to a contraction. ahead. Later today, we will see the US figures.

At the same time, I keep a focus on the earnings season which is gaining momentum as more companies report. However, the Q1 earnings are becoming less relevant. What matters more now is the forward guidance. Uncertainties started by end of the first quarter. The significant tariff disruptions only began in early Q2.

The market patterns reminds me on the years of 2001 after the burst of the IT bubble. Markets tried to rebound each time after a selloff. However, the rebound did not materialize as it was not sustainable.
Given the mounting uncertainties and the lack of a finalized tariff agreements, I have strong doubts about the sustainability of this rally. It appears more like a short-term bounce rather than the beginning of a durable upward trend.

US President Donald Trump has repeatedly criticized Fed Chairman Jerome Powell for allegedly keeping interest rates too high.
Meanwhile, investors still wait and are missing meaningful progress in the ongoing tariff negotiations.

Markets: US stocks opened sharply lower with the Nasdaq losing more than 2% in the first trading hour. Interest rates down from 4.4% to 4.35% intraday, US dollar continues to drop while gold is trading first time above USD 3’400.

My view: Trump’s new focus on Fed Chair Jerome Powell comes after Powell’s stark warning on the potential effects of tariffs on the economy.

Global equity markets remain highly sensitive to tariff-related developments.
Shifting headlines and evolving narratives continue to fuel heightened volatility and sharp market swings.

Given these dynamics, I am maintaining my current positioning, anticipating greater downside potential ahead.

As fully anticipated by markets, the European Central Bank (ECB) made another 25 basis points interest rate cut today, lowering the key rate to 2.25%.
At the same time the ECB warns of a deteriorated growth outlook on trade tensions.

Already yesterday evening, Fed chairman Jerome Powell warned of a challenging scenario.

Markets: After yesterday’s sell-off in the US, European stock indices down around 0.5%, the Euro trading lower with interest rates moving lower, gold slightly lower after yesterday’s record high with the price remain well above USD 3’300.

My view: The seventh consecutive interest rate cut by the ECB had no immediate market impact, as it was fully anticipated. With inflation showing signs of stabilization, the central bank was able to proceed confidently with this move. Attention now shifts to the upcoming press conference and any forward guidance that may be offered.

Central banks continue to signal their readiness to act in the event of market turbulence. However, last week’s rapid sell-off in US Treasuries underscores how quickly sentiment can shift. As trade tensions persist, central banks remain on high alert.

The Federal Reserve now finds itself in a similarly delicate position to that of the ECB in recent months. Persistent inflation is keeping the Fed from cutting rates, despite mounting signs of a slowing economy that would otherwise warrant more accommodative policy.

This morning, China reported a strong set of data and surprising strength. China’s economy grew by 5.4% in the first quarter of 2025, higher than the 5.1% growth expected.
In March, the industrial output surged 7.7% from a year earlier, higher than median estimates of 5.8%. The country’s retail sales rise 5.9% on an annual level in the same period.

In the meanwhile China signaled to be open for talks. Before though, they want to see a number of steps from President Donal Trump’s administration before it will agree to trade talks, including showing more respect. Before, China stopped the export of rare earths and today, Hong Kong government announced that Hong Kong Post will immediately suspend accepting packages for delivery to the US.

Markets: Asian markets traded mostly lower this morning.

My view: China's latest production and consumption figures show surprising momentum, even ahead of this month’s tariff tensions. However, despite the strong data, concerns over the looming trade barriers weighed on investor sentiment, sending Asian stock markets lower this morning, led by the tech stocks after Nvidia’s and ASML disappointing news.

For me, the uptick in consumption looks particularly encouraging, as it has lagged since the pandemic. If this rebound proves to be sustainable, it could make China’s economy more resilient to tariff-related shocks, especially in contrast to the US, where consumer sentiment has already fallen to historic lows.

Although I maintain a positive outlook on China’s stock market, I took some profit before the financial market before the recent market turmoil began. I still hold a significant allocation, but currently holding off increasing exposure as risks of further setbacks remain elevated, particularly if the US economy slides into a recession.

After market close on Tuesday, Nvidia said that it will take a quarterly charge of about USD 5.5 billion tied to exporting H20 graphic processing units to China and other destinations. The US government said it would require licenses for exports to China of its H2O artificial intelligence chips. This chip is one of Nvidia’s most popular.

During President Biden’s administration, the US restricted AI chip exports in 2022 and the updated the rules the following year to prevent the sale of more advanced AI chips.

Markets: Nvidia tumbles more than 5% in extended trading, dragging the Nasdaq Future down more than 1%.

My view: This is a sign, that Nvidia’s growth story could be slowed by increasing export restrictions on its chips. The chips could be used to create supercomputers for military uses. Why some restrictions in current environment of global tensions could make sense.

However, Nvidia’s disclosure could hit the semiconductor sector and overall market in its current vulnerable conditions.
I therefore expect more downside from here, why remaining short positioned in this specific sector and for tech stocks.