Two big U.S. companies operating in very different sectors said Monday that China’s slowing economy had forced them to lower their guidance for future sales and income.
Shares of Nvidia fell 14.4 percent Friday after the chip maker on Monday lowered its fourth-quarter guidance. Caterpillar shares sank 9.13 percent when it issued lower-than-expected profit targets for 2019.
Both companies said sales in China were to blame for the downshifts in expected returns.
Nvidia said weaker economic conditions, especially in China, had ground down for its consumer demand for its gaming graphics cards.
Nvidia’s lowered guidance hit shares of other semiconductor companies, sending shares of Advanced Micro Devices down by nearly 8 percent.
Nvidia stock is down about 53% from its October 52-week intraday high of $292.76.
Caterpillar, the manufacturer of industrial vehicles and equipment, also cited lower demand, particularly in Asia. China accounts for about 10 percent of Caterpillar’s sales.
China’s economy appears to be suffering much more than expected due to its trade dispute with the U.S. Chinese officials are due to arrive in the U.S. this week to continue talks aimed at preventing the U.S. from raising tariffs on Chinese made goods to 25 percent. Those talks are supposed to expire on March 1.