US Approves Nvidia H200 Chip Exports to 10 Chinese Companies, Geopolitical Reversal Fuels NVDA Rally

In a stark geopolitical pivot, the US government authorized the export of NVIDIA's most advanced H200 artificial intelligence chips to Chinese companies, reversing the restrictive export controls that had constrained Nvidia's China revenue to near-zero levels in recent years. The approval was flagged by traders and analysts as particularly surprising given the administration's simultaneous bombing of Iranian targets and contentious negotiations with China over trade and Taiwan policy. NVDA climbed 4.4% on the news, with CEO Jensen Huang himself dining on noodles in Beijing alongside President Trump's delegation, signaling the restored relationship and commercial opportunity.

The geopolitical calculus appeared to shift during Trump's two-day summit with Xi Jinping in Beijing. Trump publicly stated his relationship with Xi was 'very strong' and that the Chinese leader had offered to assist in resolving the Iran war and reopening the Strait of Hormuz. Against this backdrop, the restoration of China's access to Nvidia's cutting-edge chips made strategic sense to traders: recapturing 25% of Nvidia's revenue at a time when the stock had already surged 20% since May 5 and added roughly $1 trillion of market capitalization. Goldman Sachs and others had questioned whether China being a closed market was already priced into chip valuations; the answer appeared to be no, as markets celebrated the margin boost potential.

The semiconductor complex benefited broadly from de-escalation sentiment. AMD and Broadcom, which had faced collateral weakness from China export restrictions, stabilized or moved higher. However, the broader tech rally was quickly arrested by the global bond selloff and inflationThe rate at which prices rise across an economy. fears, indicating that sentiment remained fragile. Samsung's selloff in Asia and North Korea tensions also sent initial ripples through US chip futures, showing that geopolitical contagion remained a two-way street. Analysts noted that semis as a group had become crowded long positions, with options data showing elevated call-to-put ratios and insider selling at NVIDIA despite the stock's recent strength.

Critical observers warned that the precedent set by restoring China trade could reignite broader US-China commercial entanglement at a time when semiconductor supply chain decoupling had been a stated policy objective. The move also raised questions about bipartisan consensus on China containment, with some security hawks viewing the decision as a capitulation. Taiwan risk lingered in market consciousness as traders wondered whether commercial appeasement would translate to political concessions on the island.