Nvidia (NVDA) Stock Drops 3% Amid Middle East Turmoil and Chip Supply Concerns

Key Takeaways

Table of Contents

Nvidia (NVDA) shares declined 3% Friday, with an additional 1% drop in Monday’s premarket session amid escalating Middle East tensions
Major chip suppliers experienced significant losses: TSMC down 4.2%, SK Hynix plunged 9.5%, and Samsung dropped 7.8% in Asian markets
Crude oil prices jumped past $100 per barrel, with Brent crude momentarily reaching $119 — the highest since 2022
The Dow Jones recorded approximately 3% losses last week, marking its worst weekly performance since April 2025
G7 officials convened Monday to evaluate coordinated petroleum reserve releases through the IEA

Shares of Nvidia tumbled 3% during Friday’s trading session and extended losses into Monday’s premarket hours, as escalating geopolitical tensions in the Middle East sparked concerns about semiconductor supply chain vulnerabilities and sent energy prices soaring.

NVIDIA Corporation, NVDA

Premarket trading showed NVDA at $176.60, representing a 0.8% decline. Through Friday’s closing bell, the stock has surrendered 4.7% of its value year-to-date.

The semiconductor industry broadly suffered losses, with AMD shedding 3.52% and Broadcom declining 0.69% in premarket activity. The selloff swept through the entire chip sector.

Industry observers aren’t predicting immediate manufacturing shutdowns. Instead, the focus centers on gradual margin compression stemming from elevated energy and logistics expenses.

“For the technology sector the immediate risk is not a direct interruption in semiconductor production but a broader inflationary impact through energy and transportation costs,” wrote Brad Gastwirth of Circular Technologies. “Semiconductor fabrication facilities are extremely energy intensive and any sustained increase in electricity or fuel prices can affect manufacturing economics.”

TSMC, which dominates global chip manufacturing, saw shares tumble 4.2% during Monday’s trading in Taiwan. The semiconductor giant consumes approximately 9% of Taiwan’s entire electrical grid, with natural gas serving as the primary power generation source on the island.

South Korea’s memory chip manufacturers experienced steeper declines. SK Hynix plummeted 9.5% while Samsung Electronics shed 7.8% in Seoul market activity. Both companies serve as critical memory component suppliers for Nvidia’s products.

Energy Price Surge Hammers Market Futures

Oil prices rocketed approximately 25% late Sunday evening, momentarily exceeding $119 per barrel before retreating. WTI crude hovered near $103 while Brent traded above $107 — both maintaining roughly 15% gains for the session.

The dramatic price increase followed production reduction announcements from crude-exporting nations, compounded by significant disruptions near the Strait of Hormuz. Kuwait verified output reductions, while Iraqi production reportedly collapsed by approximately 70%.

Dow futures initially plummeted over 1,000 points overnight before recovering some ground. S&P 500 and Nasdaq 100 futures showed declines of 1% and 1.1% respectively entering Monday morning.

Futures stabilized somewhat following reports that G7 ministers were considering coordinated releases from IEA strategic petroleum reserves. Three nations, including the United States, reportedly expressed support for the initiative.

The previous week delivered challenging market conditions. The Dow surrendered roughly 3% — representing its most severe weekly decline since tariff-related anxiety emerged in April 2025. The S&P 500 retreated approximately 2% while the Nasdaq concluded the period down more than 1%.

Nvidia’s Path Forward

Trump’s comment that high oil costs were “a very small price to pay” for security rattled markets on Sunday, though Monday’s IEA reserve talk helped calm some nerves.

Market participants are closely monitoring Wednesday’s Consumer Price Index release and Friday’s PCE inflation data. However, these reports will likely not fully reflect the recent oil price shock.

Nvidia’s upcoming GTC conference, scheduled for March 16–19, represents the company’s next major public event. While new product announcements are anticipated, macroeconomic headwinds may dominate investor attention.

As of Monday’s premarket session, NVDA shares were quoted at $176.60.

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