Last night! Chip stocks plummeted across the board! Nvidia experienced a rare plunge

Nvidia experiences its largest single-day decline in 10 months, with chip stocks plunging across the board.

On February 26 (local time), the three major U.S. stock indices closed mixed: the Nasdaq down 1.18%, the S&P 500 down 0.54%, and the Dow up 0.03%. Nvidia fell over 5%, marking its biggest single-day drop in 10 months. The Nasdaq Golden Dragon China Index declined 1.78%, with most popular Chinese concept stocks falling.

Chip Stocks Plunge Across the Board, Nvidia Drops Significantly

On Thursday (local time), Nvidia’s stock price fell 5.46%, dragging down the semiconductor sector and the S&P 500. Goldman Sachs stated that despite Nvidia’s revenue increasing 73% year-over-year and providing optimistic guidance for AI business prospects, the stock still declined sharply. Analysts said this reflects profit-taking after strong earnings, as well as market concerns over the sustainability of AI capital expenditures by large cloud service providers.

Michael Burry, the real-life inspiration for “The Big Short,” further heightened market worries. He said Nvidia’s current purchase commitments amount to $95.2 billion, compared to only $16.1 billion a year ago, and demand fluctuations could pose risks.

Affected by Nvidia’s sharp decline, chip stocks fell across the board, with the Philadelphia Semiconductor Index dropping over 3%. Among individual stocks, CREDO TECHNOLOGY fell over 7%, COHERENT over 6%, Applied Materials, Lam Research, and ASML dropped over 4%, GlobalFoundries, Powerchip Semiconductor, and Broadcom declined over 3%, Intel, TSMC, and ON Semiconductor fell over 2%, and ARM declined nearly 2%.

Other major tech stocks showed mixed performance: Tesla dropped over 2%, Google A and Amazon declined over 1%, while Apple saw slight declines. Netflix rose over 2%, Microsoft and Meta edged higher. The storage sector weakened overall, with SanDisk up over 3%, Micron Technology down over 3%, Seagate Technology down 2.89%, Western Digital down 2.99%, and Pure Storage plummeting over 10% after earnings.

Additionally, most popular Chinese concept stocks declined: Miniso and Baidu fell over 5%, iQiyi and Bilibili dropped over 3%, Li Auto, Alibaba, and Kingsoft Cloud declined over 2%. On the rise, Vipshop gained over 2%, Xiaopao Zhixing rose over 4%, and EICAR Technology surged over 17%.

Multiple Risks to the U.S. Economy

On February 25 (local time), the International Monetary Fund (IMF) issued a statement following the fourth review of the U.S. under the Article IV consultation, projecting that the U.S. real GDP will grow 2.6% in 2026. The IMF warned that issues such as tariffs and debt pose risks to the economic outlook.

The statement indicated that higher U.S. tariffs negatively impact the economy, likely increasing the personal consumption expenditure price index and reducing economic output. The IMF expects the U.S. unemployment rate to remain near 4% in 2026 and 2027. After excluding inflation, the IMF projects real GDP growth of 2.6% in 2026 and 2.1% in 2027.

The IMF also warned that U.S. trade protectionism could have more adverse effects on its own economy than expected. Policies such as tariffs and export controls, especially when justified on national security grounds, should be kept within narrow bounds to minimize negative impacts domestically and internationally.

IMF Managing Director Georgieva advised the U.S. government to focus on reducing debt and deficits. The U.S. should cooperate with trade partners to eliminate concerns over unfair trade practices and promote the reduction of harmful trade restrictions.