Following stellar performance in 2023, U.S. semiconductor stocks have taken a hit at the start of 2024, with notable declines in Tuesday morning trading in New York. This downturn comes in the wake of the White House’s directive to a prominent European chipmaker, signaling escalating U.S.-China trade tensions.

Chart: Rocky Start To The Year For Major Chipmakers

ASML, Europe's tech giant, confirmed the Dutch government partially revoked licenses for shipping specific lithography systems to China, impacting a few customers. Despite these developments, ASML believes the recent blockade won’t significantly affect its 2023 financial outlook. Shares of ASML Holding N.V. dropped by 4.3%, marking their weakest daily performance since late July.

Why It Matters: In 2023, semiconductor stocks, as tracked by the iShares Semiconductor ETF (NYSE:SOXX), closed with a 66% gain, the best since 2009’s 74% annual increase. Yet the onset of 2024 presents challenges as the market begins to weigh the risks of a potential new tech trade war and its negative influence on the sector’s growth.

US Chipmakers Wipe Out $100 Billion On 2024’s First Trading Day

Read now: Semiconductor Stocks Soar To All-Time Highs: On Track For Strongest Year Since 2008, But Are They Too Expensive Now?

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