Taiwan Semiconductor Manufacturing (NYSE:TSM) shares fell in pre-market on Monday following the U.S. President's announcement. Joe Biden He has withdrawn from the 2024 presidential election.
Biden, 81, announced his decision on Sunday in a letter posted to social media platform X following his poor debate performance and growing pressure from Democratic lawmakers to resign.
Taiwan Semiconductor is leading the artificial intelligence chip field. NVIDIA Corporation (NASDAQ:NVDA), and Advanced Micro Devices (NASDAQ:AMD) noted the sell-off last week after former President Donald Trump suggested Taiwan should compensate the U.S. for its defense costs, noting that there is no formal defense treaty.
Additionally, last week there were reports that the US had tightened advanced semiconductor sanctions on China, a key market for Nvidia and its US peers.
SPDR S&P 500 ETF Trust SPY (NYSE:SPY), which represents the US S&P 500 index, fell 2.4% last week. iShares China Large Cap ETF China representative FXI (NYSE: FXI) fell more than 4%.
AI chip stocks including Nvidia and AMD rose in premarket trading on Monday, reversing losses from last week.
Nvidia is reportedly developing new AI chips that comply with US export controls for the Chinese market. Nvidia is reportedly working with its main distribution partner in China, Inspur, to introduce and distribute the new chips, tentatively called “B20,” which are part of Nvidia's “Blackwell” series.
Chip stocks also got a boost from China, which cut its key interest rate. China is a major market for AI chips but faces several economic challenges, including slowing growth in the second quarter and looming deflation.
The People's Bank of China (PBOC) announced on Monday that it would cut the seven-day reverse repo rate to 1.7% from 1.8% and the one-year loan prime rate (LPR) to 3.35% from 3.45%. Reuters reports that China also cut the five-year LPR to 3.85% from 3.95%.
Price Action: At last check on Monday, NVDA was up 1.76% at $120 in pre-market trading, AMD was up 1.10% at $153.25 and TSM was down 1.06% at $164.02.
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The article What's happening with AI chip stocks Nvidia, AMD and Taiwan's Semi on Monday? originally appeared on Benzinga.com.
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