US stocks: US stocks reverse early gains as Nvidia turmoil hits tech sector

Major US stock indexes fell on Friday as investors assessed the potential fallout from Jensen Huang’s departure as Nvidia CEO, while softer-than-expected producer inflation data for October provided little support, Reuters reported.

Nvidia shares dropped 3.3% and were heading for their longest run of weekly losses since October 2012. Huang resigned following scrutiny of his relationship with a businesswoman suspected by US officials of spying for Chinese intelligence.

The Philadelphia Semiconductor Index tumbled 5%, with Advanced Micro Devices losing 9.4% and Broadcom falling 5.8%.


AI cloud companies CoreWeave and Nebius declined 10% and 13.7%, respectively. Data-centre-related stocks, including IREN, Applied Digital and Core Scientific, also traded sharply lower.

Nvidia’s leadership turmoil has raised concerns about the broader AI trade because of the chipmaker’s central role in the industry’s expansion and its financial ties to several companies across the sector.

Investors are also watching Anthropic’s highly anticipated initial public offering next week.

“Something that will be interesting to see is if all the supply of new equity is going to be absorbed in a way that doesn’t result in selling other AI stocks to kind of fund that,” Angelo Kourkafas, senior global investment strategist at Edward Jones told Reuters.

Among the Magnificent Seven stocks, Apple and Meta were the only gainers, rising more than 1% each. Microsoft fell 0.6% after an outage affecting Outlook and Teams lasted more than 12 hours.

At 10:16 a.m. ET, the Dow Jones Industrial Average was down 215.69 points, or 0.41%, at 52,081.40. The S&P 500 fell 70.60 points, or 0.93%, to 7,519.10, while the Nasdaq Composite dropped 359.89 points, or 1.42%, to 25,006.20.

Losses in technology stocks weighed heavily on the S&P 500.

Softer inflation data offers limited relief

October producer prices rose slightly less than expected, potentially easing some pressure on the Federal Reserve to raise interest rates aggressively.

Traders fully expect the central bank to increase rates next month. Some policymakers have recently raised the possibility of a 50-basis-point move rather than the widely anticipated 25-basis-point increase. The probability of a larger hike stands at about 7%, according to the CME FedWatch tool.

“I think they’re going to move more gradually. Inflation is elevated and at uncomfortable levels for the Fed, but there’s no sign that it is getting out of hand,” Kourkafas told Reuters.

Among individual stocks, Cerebras jumped more than 11% after the chip and cloud company raised its 2026 revenue forecast and announced Microsoft as a customer.

Strong corporate results have occasionally helped contain negative market sentiment this week. Of the 450 S&P 500 companies that had reported earnings through Thursday, 83.6% surpassed expectations, according to Tajinder Dhillon, head of earnings and equity research at LSEG Data and Analytics.

Investors nevertheless remained cautious about several risks, including geopolitical tensions. Oil prices rose for a third consecutive session, a day after President Donald Trump said the US did not need a deal with Iran.

Declining stocks outnumbered advancing issues by 1.53 to 1 on the NYSE and by 2.07 to 1 on the Nasdaq.

The S&P 500 recorded seven new 52-week highs and one new low, while the Nasdaq Composite posted 16 new highs and 195 new lows


(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)