NEW YORK — A drop for Nvidia’s stock is pulling the U.S. market lower Thursday, threatening to upend the boom in artificial intelligence technology that carried Wall Street to record after record in recent years.
The S&P 500 fell 0.6 per cent in its latest yo-yo move. The weakness for AI stocks dragged the Nasdaq composite down 0.9 per cent, but the rest of the market was holding up better. The Dow Jones Industrial Average was down a modest 15 points, or less than 0.1 per cent, as of 9:35 a.m. Eastern time.
Nvidia’s stock dropped 9.7 per cent following the resignation of Jensen Huang, its CEO, co-founder and face of the brand. The chip company’s stock has been sinking since its board announced an investigation into Huang for a relationship with a woman suspected of being a Chinese government agent.
It’s a stunning fall for Nvidia, which had become Wall Street’s most valuable and influential stock because of its central role in the artificial intelligence boom. Its stock price set a record high last month after soaring an astounding 1,722 per cent in four years. That compares with the already healthy gain of nearly 109 per cent for the overall S&P 500 over the same time.
But Nvidia’s price dropped 27 per cent from then through Wednesday on worries about whether Huang would remain and how Nvidia would navigate a future without him. Nvidia’s board answered the first question Thursday morning, when it said Huang resigned, and it named Chief Financial Officer Colette Kress as its interim CEO.
The second question remains to be determined. And it looms over the entire market because Nvidia and the broader AI industry have been the main reasons the U.S. stock market has set so many records in recent years.
Wall Street’s immediate reaction on Thursday was to punish stocks across the AI industry, though some of Nvidia’s rivals held up better in hopes of a competitive advantage.
CoreWeave, which buys Nvidia chips and then rents out access to them to customers over the cloud, fell 10.9 per cent. Micron Technology, which sells memory for computers that’s been getting gobbled up in the AI frenzy, sank 3.1 per cent. GE Vernova, which is helping to power AI data centres, slipped 0.8 per cent.
But Broadcom rose 5.2 per cent, and Advanced Micro Devices added 2 per cent. They were two of the strongest forces limiting the S&P 500’s losses.
Stocks also felt some pressure after President Donald Trump said he’s no longer interested in a deal with Iran to end their war, which briefly sent oil prices, worries about inflation and Treasury yields jumping. Instead of that, Trump said he asked his vice president to focus on investigating U.S. cities and states run by Democrats.
“We don’t need a deal with Iran,” Trump said on his social-media platform. “Those days have long since passed. We’ve got their money, Hundreds of Billions of Dollars, and we’ve got their Strait!”
The price for a barrel of Brent crude oil suddenly went from about US$92 to more than US$94 following Trump’s posting, before it later eased back. It was most recently at US$93.34, up 0.6 per cent.
It’s been swinging sharply since the United States and Israel began the war with Iran in late February, bouncing between roughly US$70 and US$150.
In the bond market, the yield on the 10-year Treasury climbed to 5.03 per cent from 4.98 per cent late Tuesday. Trading in the bond market had been closed Wednesday for Veterans Day.
In stock markets abroad, indexes rose modestly in Europe following a weaker finish in Asia.
Hong Kong’s Hang Seng fell 1.3 per cent for one of the world’s biggest moves.
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Yuri Kageyama, The Associated Press
AP Business Writer Yuri Kageyama contributed to this report
