Nvidia Faces Scrutiny as AI Chip Export Curbs Tighten

Nvidia’s stock is in focus as the US moves to tighten restrictions on AI chip exports to China, prompting a sell-off in Chinese tech stocks, with Alibaba’s Hong Kong shares plunging nearly 8%. Gold hit a record high overnight, nearing $3,000 an ounce, amid geopolitical tensions and weaker US economic data pointing to possible Fed rate cuts. Treasury yields fell to fresh two-month lows, while US equity markets saw mixed performance, with the Dow inching up, the S&P 500 dropping 0.5%, and the Nasdaq down 1.2%.

Equities

The FTSE 100 ended flat on Monday after four consecutive days of losses as investors waited for comments from Bank of England policymakers on interest rates. The FTSE 250 fell 0.6%, reaching its lowest close since 28 January.

B&M dropped 2.1% after issuing a profit warning and announcing that CEO Alex Russo would retire. National Grid rose 2% after confirming the sale of its US renewables business to Brookfield Asset Management for $1.74 billion. Wood Group surged 42% after revealing it had received a fresh takeover approach from Sidara.

BAE Systems jumped 4% after securing a $230.6 million contract from NASA. Mining companies struggled, with Rio Tinto, Glencore, and Anglo American falling between 1.5% and 1.8% as concerns about tariffs and slowing demand weighed on commodity prices.

The S&P 500 fell 0.5%, marking its third straight day of declines, while the Nasdaq dropped 1.2%, extending its losses to four days in February. The Dow Jones managed to gain 0.08%. Technology stocks were the biggest drag, with Nvidia falling 3.1% ahead of its earnings report, as investors questioned future demand for AI chips.

Microsoft lost 1% after reports suggested it had cancelled some data centre leases in the US, raising concerns about AI infrastructure spending. Broadcom fell 4.9%, while Amazon declined 1.8%. AI software firm Palantir Technologies dropped 10.5%, making it the worst-performing stock in the sector.

Nike rose 4.9% after Jefferies upgraded the stock to “buy”. Berkshire Hathaway hit a record high after reporting record annual profits, with its class B shares climbing more than 4%. Apple edged up 0.7% after announcing plans to invest $500 billion in US projects over the next four years, including an AI server factory in Texas.

Forex & Commodities

The US dollar rebounded after falling to a two-month low, supported by safe-haven demand following President Donald Trump’s confirmation that tariffs on Mexico and Canada would proceed as planned. The euro slipped from a one-month high to $1.0476 as investors monitored coalition talks in Germany. Sterling also retreated slightly from Monday’s two-month high, last trading at $1.2639. Against the yen, the dollar edged up to 149.75, reversing earlier losses driven by falling US Treasury yields and speculation about another Bank of Japan rate hike.

Gold hit another record high, reaching $2,956.15 an ounce, as investors moved towards safe-haven assets in response to tariff concerns. US gold futures settled 0.3% higher at $2,963.20. Holdings in the SPDR Gold Trust, the largest gold-backed exchange-traded fund, rose to their highest level since August 2023, adding further support to prices.

Oil prices climbed for a second consecutive day as fresh US sanctions on Iran raised concerns about tighter supply. Brent crude rose 0.2% to $74.93 a barrel, while West Texas Intermediate (WTI) gained 0.3% to $70.93 a barrel. The US imposed new sanctions on over 30 companies involved in Iranian oil shipments, reinforcing Trump’s commitment to reducing Iran’s crude exports to zero.