Why Nvidia stock is down around 2% today

Nvidia NVDA shares fell around 2% on Wednesday, extending a recent selloff in semiconductor stocks as investors weighed rising geopolitical tensions, higher oil prices, and growing questions over the sustainability of artificial intelligence spending.

The stock traded around $192, remaining below the psychologically important $200 level.

The broader market also came under pressure as oil prices surged ahead of the Federal Reserve's latest interest rate decision.

The Dow Jones Industrial Average fell 853 points, or 1.6%, while the S&P 500 declined 0.9%. The Nasdaq Composite dropped 1.2%.

Chip stocks remain under pressure

Semiconductor stocks extended their recent losses, with the iShares Semiconductor ETF falling more than 4%.

The sector has declined about 10% over the past four trading sessions as investors reassess the returns on heavy AI infrastructure spending and monitor increasing competition from China.

Micron Technology fell 5%, while Advanced Micro Devices also declined more than 5%.

The latest market weakness coincided with another sharp rise in oil prices after President Donald Trump told Fox News that the United States would hit Iran "hard" following surprise attacks.

West Texas Intermediate crude futures climbed 6.9% to $89.88 a barrel.

Big Tech earnings in focus

Investor attention has shifted to quarterly earnings from Microsoft, Meta Platforms, and Amazon, with the reports expected to provide fresh insight into the pace of artificial intelligence investment.

Capital expenditure guidance will be closely watched as a leading indicator of future demand for Nvidia's graphics processors.

Investors will also look for commentary on AI hardware procurement as major technology companies continue developing custom processors with partners such as Broadcom for specific workloads.

While custom chips are generally designed to complement rather than replace Nvidia's graphics processing units, investors continue to assess whether broader adoption could gradually reduce reliance on third-party suppliers.

The earnings reports are expected to help determine whether hyperscale technology companies intend to maintain their current pace of AI infrastructure investment.

ARK Invest buys the dip

Despite the recent selloff, Cathie Wood's ARK Invest added to its Nvidia position.

The firm's flagship ARK Innovation ETF purchased 78,965 Nvidia shares on Tuesday, valued at approximately $15.5 million.

The purchase came a day after Nvidia fell 5% amid investor concerns surrounding more than $750 billion of reported AI infrastructure financing initiatives involving OpenAI and other partners.

ARK also added shares of Tesla and Intuitive Machines during Tuesday's trading session.

The purchase reflects ARK's strategy of increasing positions following sharp share price declines, even as investors continue debating whether elevated AI infrastructure spending will generate sufficient long-term returns to justify current investment levels.