Nasdaq index hit a 2-year low amid fresh restriction by Biden administration on China’s access to U.S. technology

The Nasdaq index dropped to a 2-year low after the Biden administration barred China from using American technology. The technology index is under significant pressure as chip stocks traded on the American market plunge. The ban was put in place to counter China’s advancement of technology and military hardware.

Even though the U.S. had a stronger interest in the technology ban on China, the news was too much for the chip makers to digest since they are already experiencing a slowdown in the demand for electronic products like computers, cell phones, and other gadgets. Electronic stocks like Microsoft, Nvidia, and AMD fell around 1% to 5% lead a fall in the Nasdaq composite to a fresh 2-year low.

The S&P 500 and Dow Jones both declined by 0.5%, and the Nasdaq composite dropped by about 1%, pushing the overall market attitude from cautious to negative. The current geopolitical tensions between Russia and Ukraine are being closely watched by investors also. Better jobs data has already given a signal of a hawkish stance with a more 0.75% hike by Fed in the next policy meeting in November’s first week. Up until the release of U.S. September consumer pricing data on 13 October, the market will remain volatile and investors’ thoughts will remain fearful. It will be interesting to observe whether the CPI numbers show that the Fed’s rate hikes had any impact on the inflation rate.