The US Commerce Department closed its review of Megaspeed, which purchased Nvidia chips. The review was halted after Nvidia itself reached out. The US Justice Department is already conducting a criminal investigation into the same client.
In the materials, Megaspeed appears specifically as a buyer of Nvidia chips. A criminal investigation is two levels more serious than an administrative review. An agency review threatens paperwork and bans; a criminal case means charges against specific people and companies.
This affects traders through the indices. Nvidia is one of the most heavily weighted stocks in the US market, so any new headline about it moves the entire technology block.
Who is reviewing what?
- US Commerce Department - issues permits for exporting powerful artificial intelligence accelerators abroad.
- Export controls - a government filter without which a chip cannot be sold to a number of countries.
- US Justice Department - pursues the case on the criminal track and in its own way; the outcome could be charges against specific companies and people.
On procedure. The Commerce Department closed the Megaspeed review after Nvidia contacted it. The ministry claims the case was conducted strictly by procedure.
Why is the backdrop heavy?
- November 7. We wrote about Nvidia's board of directors review regarding Jensen Huang, the company's founder and CEO.
- November 10, 19:27 MSK. It became public that the Commerce Department had halted the Megaspeed review.
The price of the matter. Nvidia shares are currently trading 26% below their record close.
What does this mean for a trader?
The significance here is not in the stock itself. Nvidia is one of the most heavily weighted stocks in the S&P 500 and Nasdaq 100.
- A new document on export restrictions - moves the entire technology block of the indices at once.
- A Justice Department statement - the effect is the same; the reaction runs across the whole block.
Key point: positions in US indices now depend on headlines about a single company. If you trade indices, it makes sense to pick a challenge for indices in advance.
What happens next?
No timeline for the investigation has been given. Headlines can come out any day, including during the US session.
- Two tracks. The Commerce Department review is closed; the Justice Department criminal investigation continues.
- Preparation. How the account, limits and payouts work is covered in the academy.
Have you been trading Nvidia's drawdown?
A stock that drags the entire Nasdaq with it is sitting 26% below its record. Stories like this are analyzed every day. What usually gets in the way is the nominal: the percentage move of an index on a small account is a couple of dollars. In prop trading, the company provides the capital for trading: first a paid skills test, then an account with loss limits and a payout of an agreed share of profits. It's calmer to understand the mechanics now, while the case is only unfolding.