Chips Crater on China Export Curbs; NVDA, AMD Lead Losses Despite H200 Approval

The semiconductor sector faced a sudden reversal on Friday as geopolitical and policy crosscurrents collided. While the White House announced approval for NVIDIA to sell its H200 advanced AI chips to 10 Chinese companies, China simultaneously signaled displeasure with broad US chip exports. The contradiction reflects the brittle state of US-China tech competition; Beijing's implicit message that it does not want our chips at the moment outweighed the headline approval.

NVIDA dropped 2.2% to 4.4% on the session, while AMD fell 3.3%, Broadcom (AVGO) declined, and memory names like Micron (MU) tumbled 5%. The selloff was not isolated to semiconductors; broader macro concerns about oil prices, inflationThe rate at which prices rise across an economy., and rising bond yields (30-year yield hit 5.11%, highest since May 2025) triggered a wider de-risking. Equity index futures fell 1%; the Nasdaq Composite slid 1.3% while the Russell 2000 gained 0.7%, signaling a sharp rotation into small-cap value and away from mega-cap growth.

Context matters here: China had been 25% of NVIDIA's total revenue before export restrictions were imposed. While the H200 approval suggests some thaw in the relationship (particularly given Trump's recent summit with Xi), Beijing's skeptical reaction implies China is accelerating its own domestically-designed chips and may not need to import bleeding-edge US hardware. Semiconductor equipment makers like ASML and LRCX also felt the pressure, as did memory-linked infrastructure plays like Palantir and Super Micro.

The debate centers on whether this is a temporary repricing or a structural shift in AI capex allocation. Some analysts argue the H200 approval signals Trump administration pragmatism and may ease export pressure longer-term. Others contend that China's saber-rattling suggests Beijing has made enough progress on domestic alternatives (Huawei, others) that US chip reliance is waning. For equity investors, the macro backdrop (inflationThe rate at which prices rise across an economy., yields, energy costs) appears to be the dominant driver today, with chip policy as a secondary headwind.