Nvidia stock drops 6%, extending decline on report alleged Chinese spy linked to Nvidia CEO aided $7.5 billion in China chip shipments

Nvidia ( NVDA ) stock extended its decline Tuesday, falling as much as 6% after dropping 4% in the prior session. The stock came under pressure amid a broader market sell-off and growing concerns about increased scrutiny of the chipmaker following CEO Jensen Huang's admission to an affair believed to involve a woman suspected of being a Chinese spy.

Scrutiny centers on Alice Huang, whom the US government reportedly identified as a Chinese intelligence asset, and her ties to Nvidia CEO Jensen Huang dating back to at least 2023.

The Information reported that their rapport could have helped facilitate the shipment of at least $7.5 billion worth of Nvidia chips through Chinese companies, according to two people who know her and corporate records.

On Monday, US House Democratic Leader Hakeem Jeffries said Congress needs more answers about the matter, adding that there are "real ⁠concerns that need to be addressed with respect to the ​Nvidia situation."

President Trump, meanwhile, told reporters that the FBI was looking into Huang's relationship, while still expressing support for the Nvidia CEO.

"We'll look into it," said Trump. "I know the FBI is looking into it in terms of something else, and I think that he'll be in good shape."

The broader semiconductor sector wavered on Tuesday amid a broader market sell-off after a hotter-than-expected October inflation reading, which strengthened expectations for a rate hike next month.

Rrival AMD ( AMD ) stock rose 4% before giving up gains. Broadcom ( AVGO ) shares gained more than 1%, while Intel ( INTC ) stock was little changed.

Shares of Taiwan Semiconductor Manufacturing Company ( TSM ), which manufactures Nvidia chips, wavered, while semiconductor equipment maker ASML ( ASML ) slipped into red territory.

Storage maker Sandisk ( SNDK ) and memory chipmakers Micron Technology ( MU ) and SK Hynix ( SKHY ) declined.