Nvidia uncertainty is now weighing on the wider US market. The Nasdaq Composite lost 0.91% on the day, yet rose 2.27% for the week after snapping a four-week losing streak. No Bursa Malaysia-listed company features in this report, so treat the figures below as a read-across for Malaysian investors holding US tech.
Why Did Nvidia Shares Fall for Six Straight Weeks?
Huang resigned on Thursday after revelations of extramarital affairs, including a relationship with a businesswoman suspected by the US of spying for China. The Financial Times reported that Nvidia’s board has approached Arm Holdings CEO Rene Haas in its search for a successor.
Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan, said “there’s been a loss of confidence.” He added that Huang was “basically the AI champion and willing to use Nvidia’s balance sheet to fund a lot of this AI expansion. That’s gone.”
Sweeping Democratic victories in last week’s midterm elections also raised concerns that government regulations could slow growth among AI-related companies.
How Did the S&P 500, Nasdaq and Dow Close?
- Dow Jones Industrial Average: up 50.46 points (0.10%) to 52,347.55
- S&P 500: down 30.73 points (0.40%) to 7,561.67
- Nasdaq Composite: down 229.82 points (0.91%) to 25,136.27
For the week, the S&P 500 gained 2.51%, the Nasdaq rose 2.27% and the Dow climbed 2.07%. The Dow was the only index to end the day higher.
Declining issues outnumbered advancers by 1.28-to-1 on the New York Stock Exchange and 1.61-to-1 on the Nasdaq. The S&P 500 posted 9 new 52-week highs and 1 new low, while the Nasdaq recorded 37 new highs and 340 new lows.
Volume on US exchanges reached 16.38 billion shares, below the 18.52 billion average for the full session over the last 20 trading days.
Which Tech Stocks Dragged the Index Lower?
The Philadelphia Semiconductor Index fell 3.4%, with Advanced Micro Devices dropping 8.8% and Broadcom down 4.8%. Neoclouds CoreWeave and Nebius also ended lower.
Data center-related firms IREN lost 6.7% and Applied Digital fell 5.8%. The S&P 500 technology index shed 1.7%, the worst performer of the 11 major S&P sectors.
Microsoft ended 0.2% higher after erasing earlier declines, as a global outage that included its Outlook and Teams products began to ease. Airlines fell in the final minutes of trading, with the NYSE Arca airline index closing down 1.4% after the US Federal Aviation Administration issued a national ground stop of all departing flights on Friday.
Could Anthropic’s IPO Pull Money From Nvidia?
Anthropic’s much-anticipated IPO is due next week. Analysts note it could test investor appetite for established AI heavyweights, as money potentially shifts toward the new entrant.
Why Are Rate Hikes Back in Focus for Tech Stocks?
US producer prices rose 6.5% year over year in October, the largest annual gain since November 2022, though slightly cooler than expected. The data locked in expectations for a rate hike of at least 25 basis points at the Fed’s December meeting.
CME FedWatch shows a roughly 10% chance of an outsized 50-basis-point increase. San Francisco Fed President Mary Daly said her “bias” is that the central bank will need to increase its policy rate, while Boston Fed President Susan Collins said tighter monetary policy is coming because of high inflation.
Key Takeaways
- Nvidia shares fell 2%, extending a sixth straight weekly decline, the longest since October 2012.
- The S&P 500 closed at 7,561.67 and the Nasdaq Composite at 25,136.27, yet both gained for the week.
- The S&P 500 technology index shed 1.7%, the worst of 11 sectors.
- Producer prices rose 6.5% year over year, keeping a December rate hike firmly in view.
- Anthropic’s IPO next week could shift investor money away from established AI names.
Readers tracking AI names can compare research approaches in our AI Stock Analysis for Malaysians guide.
Frequently Asked Questions
Why did Nvidia shares fall this week?
Nvidia shares fell 2% and recorded their sixth straight week of declines, the longest streak since October 2012. The drop followed CEO Jensen Huang’s resignation on Thursday and uncertainty over who will succeed him.
Who could replace Jensen Huang at Nvidia?
The Financial Times reported that Nvidia’s board has approached Arm Holdings CEO Rene Haas in its search for a potential successor. No appointment has been reported in the source article.
How much did the S&P 500 and Nasdaq close at?
The S&P 500 lost 30.73 points (0.40%) to close at 7,561.67, while the Nasdaq Composite lost 229.82 points (0.91%) to 25,136.27. Both still posted weekly gains of 2.51% and 2.27% respectively.
Does the Nvidia sell-off affect Bursa Malaysia stocks?
No Bursa Malaysia-listed company is named in this report. Investors may want to watch how US tech moves affect sentiment in regional markets, but the report does not link the two directly.
Disclaimer: This article is for general information only and does not constitute investment advice. Always do your own research before making any investment decision.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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