NEW YORK — The U.S. stock market shook Thursday, but it largely absorbed big swings for Nvidia and oil prices and finished with relatively modest losses. The moves suggested Wall Street sees limited fallout for the artificial intelligence industry, which carries immense influence on the market, despite the sudden fall of one of its biggest evangelists.
After dropping nearly one per cent at the start of trading, the S&P 500 quickly erased all of the loss before finishing with a dip of 0.4 per cent. The Dow Jones Industrial Average fell 189 points, or 0.4 per cent, while the Nasdaq composite sank 0.4 per cent after trimming an early drop of 1.6 per cent.
Stocks broadly felt pressure from a rise in oil prices after U.S. President Donald Trump said he’s no longer interested in a deal with Iran to end their war. Instead of that, Trump said he asked his vice president to investigate U.S. cities and states run by Democrats.
On a typical day, that could be the main driver of action on Wall Street. But little has been typical recently for the yo-yoing stock market.
The focus instead was on Nvidia’s stock. It plunged 14 per cent at the start of trading 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 Huang and for Nvidia, which had become Wall Street’s most valuable and influential stock because of its central role in the AI boom. Its stock price set a record 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. At first, the drop was because of worries about too-high prices for stocks across the AI industry.
More recently, it’s been due to worries about whether Huang would remain as CEO 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 unanswered. 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.
Nvidia, to be sure, is still selling AI chips at a quick rate regardless of who stands on a stage and talks them up, and analysts said it remains the industry’s leader. That helped Nvidia quickly halve its early loss Thursday, and its stock finished with a fall of 4.3 per cent. That paring helped the broader market to recover.
Outside of Nvidia, stocks across the AI industry swung in the uncertainty.
CoreWeave, which buys Nvidia chips and then rents out access to them to customers over the cloud, fell 6.9 per cent. Micron Technology, which sells memory for computers that’s been getting gobbled up in the AI frenzy, sank 1.6 per cent.
But Broadcom rose 5.5 per cent, and Advanced Micro Devices added 5.9 per cent on hopes the rival chip companies will gain a competitive advantage. Those two gains came close to offsetting the drop for Nvidia, which was the single heaviest weight on the S&P 500. That suggests investors see the AI business expanding to other players rather than depending solely on Nvidia.
Also helping to limit the U.S. market’s losses were gains for stocks in the oil and gas industry. Marathon Petroleum climbed 2.5 per cent, and ExxonMobil added 1.8 per cent.
They benefited from a rise in oil prices after Trump said on his social media platform, “We don’t need a deal with Iran. 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 climbed 3.3 per cent to US$95.82.
The price for the most actively traded contract in the Brent market has been veering sharply since the United States and Israel began the war with Iran in late February, bouncing between roughly US$70 and US$120.
Higher oil prices push up worries about inflation, and the yield on the 10-year Treasury jumped to 5.12 per cent from 4.98 per cent late Tuesday. Trading in the bond market had been closed Wednesday for Veterans Day.
Higher yields make borrowing money more expensive for everyone, from the U.S. government to companies building AI data centres to regular people buying houses. High mortgage rates helped send sales of previously occupied U.S. homes in October to their slowest pace in more than 16 years.
The housing industry has been slowing the U.S. economy but not upending it. A separate report on Thursday said that slightly more U.S. workers applied for unemployment benefits last week, but the number remains relatively low compared with history.
All told, the S&P 500 fell 26.98 points to 7,592.40. The Dow Jones Industrial Average dipped 189.40 to 52,297.09, and the Nasdaq composite sank 100.10 to 25,366.09.
In stock markets abroad, indexes were mixed 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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Stan Choe, The Associated Press
AP Business Writer Yuri Kageyama contributed to this report.
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