U.S. Stocks Fall: Tech Giants NVIDIA and Broadcom in Focus Amid Trade Tensions

The ongoing trade tensions between the U.S., Canada, and Mexico are adding layers of complexity for investors to consider. The Dow Jones Industrial Average (DJIA) is down 0.77%, the NASDAQ Composite Index has declined by 1.10%, and the S&P 500 Index is down 0.97%. These declines are partly attributed to the lingering tariff worries and the impact of trade tensions on global supply chains.

NVIDIA: A Tech Leader Under Scrutiny

NVIDIA, a leading player in the semiconductor industry, has been a focal point for investors. The company's stock price has been volatile, reflecting the broader market sentiment influenced by trade tensions. On March 6, 2025, NVIDIA's stock price was $114.71, down 2.21% from the previous day. This volatility can be attributed to the broader market sentiment influenced by tariff worries and the potential for further disruptions in global trade.

NVIDIA's performance is closely tied to the demand for its graphics processing units (GPUs), which are used in data centers, gaming, and artificial intelligence applications. The company's strong demand for AI and data center solutions has driven its stock price, with a 183.22% YTD return and 184.62% TTM total return. However, the ongoing trade tensions pose significant risks to NVIDIA's supply chain, particularly its reliance on Chinese markets for both production and sales. The company has been actively diversifying its supply chain and exploring alternative manufacturing locations to mitigate these risks.

Broadcom: Navigating Trade Tensions

Broadcom, another key player in the semiconductor industry, will report Q4 earnings after the closing bell on Thursday March 6. Broadcom's diversified business model, which includes both semiconductor solutions and infrastructure software, has helped the company navigate the trade war relatively well. The company has been focusing on expanding its presence in the data center and telecommunication sectors, which are less affected by trade tensions. Broadcom has also been investing in cybersecurity solutions, which are in high demand due to the increasing threat of cyber attacks.

Trade Tensions and Treasury Yields

The 2-year Treasury yield has slid as tariff worries linger, indicating broader market sentiment is being affected by these tensions. This is evident from the data showing that yields on U.S. government debt were mixed on March 6, 2025, as the impact of tariffs weighed on broader sentiment. Additionally, the 10-year yield jumped by the most in two weeks on March 5, 2025, due to tariff relief and better-than-expected data, suggesting that market volatility is closely tied to trade developments.

The trade deficit ballooning to a record high in January 2025, as companies scrambled to import goods to avoid tariffs, further illustrates the economic strain caused by these tensions. This economic strain can lead to reduced consumer spending and increased costs for tech companies, affecting their stock performance.

The recent movements in the 2-year and 10-year Treasury yields have had a notable impact on investor sentiment towards tech stocks, particularly nvidia and Broadcom. On March 6, 2025, the 2-year Treasury yield slid as tariff worries lingered, while the 10-year Treasury yield jumped by the most in two weeks due to tariff relief and better-than-expected data. These movements reflect broader economic sentiments and have implications for tech stocks.

For instance, the 2-year Treasury yield was reported at 3.998% on March 6, 2025, indicating a decline due to tariff concerns. This decline suggests that investors are seeking safer assets amid economic uncertainty, which can lead to a shift away from riskier investments like tech stocks. Conversely, the 10-year Treasury yield rose to 4.32%, reflecting optimism from tariff relief and positive economic data. This rise can boost investor confidence in the economy, potentially driving demand for tech stocks.

NVIDIA and Broadcom Stock Performance