Shares of Nvidia Corporation ( NVDA ) are trading lower Friday after reports emerged that the Trump administration is preparing a new set of export restrictions aimed at China's tech sector.

What To Know: The proposed rule would extend existing sanctions to include subsidiaries that are majority-owned by companies already on U.S. trade restriction lists, such as the Entity List and Military End-User list, according to Bloomberg.

The new rule is intended to close loopholes that allow sanctioned Chinese firms to continue operating through affiliated entities not currently subject to controls. The policy would apply a 50% ownership threshold and could be announced as early as June, although the timing and specific companies affected remain under review. U.S. officials are also reportedly considering adding new Chinese chipmakers, including Changxin Memory Technologies and parts of Semiconductor Manufacturing International Corp., to the list of targeted firms.

The move adds pressure to semiconductor stocks like Nvidia ( NVDA ), which are exposed to the global chip supply chain and generate significant revenue from international markets. Tensions between the U.S. and China have escalated in recent weeks, following Trump's claim that China violated recent trade agreements and amid China's own restrictions on critical mineral exports.

Nvidia's ( NVDA ) decline reflects investor concerns over the potential impact of heightened export controls on chipmakers' access to Chinese markets, as well as broader uncertainty around U.S.-China tech policy.

NVDA Price Action: Nvidia ( NVDA ) shares were down 2.95% at $135.07 at the time of writing, according to benzinga Pro.

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