Nvidia stock drops as US Senators urge pause on AI chip exports to China

Traders Union
All News
Financial News
Nvidia slides 2.40% today to $174.39

Highlights

Escalating hostilities in Iran have increased oil prices and disrupted supply chains, raising Nvidia's freight costs and pressuring margins.
Heightened U.S. regulatory scrutiny and potential AI chip export curbs to China add significant risk to Nvidia's overseas sales outlook.
Nvidia trades below key moving averages with strong selling momentum, as the price faces resistance at $184.74 and risks breaking support at $171.30.

Heightened regulatory and supply risks as geopolitical tensions escalate

Rising hostilities in Iran have driven up oil prices and caused disruptions in the Strait of Hormuz, increasing Nvidia’s supply chain and air freight costs from Taiwan and pressuring gross margins. On Wednesday, U.S. Senators Elizabeth Warren and Jim Banks called for the Commerce Department to pause Nvidia’s AI chip export licenses to China and parts of Southeast Asia following Justice Department charges tied to Super Micro Computer over a scheme to divert restricted AI servers to China, heightening regulatory risk and the threat of further export curbs. U.S. federal authorities arrested a Chinese national and two Americans for attempting to smuggle export-controlled Nvidia chips to China, underscoring national security scrutiny of Nvidia’s global sales. Diplomatic efforts by the U.S. administration are underway to de-escalate the Iran conflict, and any resolution could rapidly ease market volatility and supply chain pressures affecting Nvidia. Investors remain wary of further government action concerning export restrictions, as well as ongoing risks associated with geopolitical instability in key shipping lanes.

Bearish momentum sustained as technical signals weaken further

Technical momentum remains negative, with NVDA trading beneath the SMA-20, SMA-50, and SMA-200. Immediate resistance is set at the Ichimoku Kijun ($184.74), while near-term support is concentrated in the low $170s. MACD on the daily chart signals downside momentum, supported by a low ADX (14.10) which points to weak trend strength. Both RSI (46.39) and CCI (-40.10) are below neutral, confirming a bearish to neutral bias; Stoch RSI is neutral, and BBP is overbought, showing divergence between price pressure and oscillator extremes. Awesome Oscillator also indicates selling momentum, reinforcing seller dominance intraday.

Lower probability of rebound as downside risks dominate short-term outlook

Over the next five trading days, NVDA is expected to trade within a volatility band of $171.30 to $181.21. There is less than a 20% probability of a price increase, making further declines more likely. The baseline scenario envisions a sideways drift between immediate resistance at $184.74 and support in the low $170s. A move above $184.74 would indicate a switch to bullish momentum, while a breakdown below $171.30 may accelerate selling pressure.

Anton Kharitonov, expert at Traders Union, sees persistent selling pressure on NVIDIA with negative technical momentum. He notes that geopolitical risks and new export restrictions add to the cautious outlook, as regulatory and supply chain challenges remain unresolved. The analyst believes support in the low $170s must hold to avoid another leg down, while resistance near $184.74 limits upside potential for now. "Base case remains sideways to lower as long as price stays under $184.74 — I remain defensive until key resistance is broken."

Earlier, analysts noted that Nvidia was experiencing persistent bearish momentum and heightened downside risks amid legal uncertainties. The emergence of geopolitical pressures and rising regulatory scrutiny now deepens the risk landscape, making sustained price action below $171.30 a potential trigger for accelerated selling.

Source of Data: NVDA Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.