U.S. stocks closed lower on Friday, capping a volatile week that ended with positive weekly gains for major market averages.
Technology Shares Slide on Nvidia Turmoil
The Nasdaq Composite dropped 0.91 percent to 25,136.27. The S&P 500 slid 0.4 percent to 7,561.67, according to CNBC.
The Dow Jones Industrial Average gained 50.46 points to close at 52,347.55. That was a gain of 0.1 percent.
Technology stocks led the downside as the market reacted to the departure of Nvidia boss Jensen Huang. Huang resigned following reports of extramarital affairs, including a relationship with a woman U.S. intelligence officials believe is a Chinese spy.
Nvidia shares fell 2 percent on Friday. This extended a more than 4 percent drop from the previous session.
“Even before all of this came out, and even before the election, chip stocks had been under pressure. There had already been worries about a blue wave — worries about a Democratic sweep — and worries about the return on investment on all of this capex,” said Ross Mayfield, investment strategist for Baird Private Wealth Management.
One chart captures Nvidia’s historic day like no other: $123bn worth of shares changed hands – a record. A colossal tug-of-war between bulls and bears. A buying opportunity for some. An escape route for others. $NVDA is Wall Street’s ultimate battleground. pic.twitter.com/jI3Le0M6Xl
“It hasn’t really changed the broad tenor of the market,” Mayfield said.
Caution persisted across the market because of management instability at Nvidia following the departure of CEO Jensen Huang. HSBC downgraded the chipmaker to hold, believing that the stock will languish until the company lays out a permanent succession plan.
Nvidia shares fell after Jensen Huang’s resignation. They recorded their sixth straight week of declines, their longest streak since October 2012.
The S&P 500 slid 0.4% to finish at 7,561.67. The Nasdaq Composite dropped 0.91% to 25,136.27.
The Dow Jones Industrial Average rose 46.14 points to 52,343.23. That was a rise of 0.09 percent.
You're going to get a lot of AI FUD today but just remember that $META, $AMZN, $GOOGL, $SPCX and $MSFT aren't suddenly going to stop building capacity, enterprises aren't going to abandon AI adoption and inference workloads aren't going to disappear because $NVDA has a new CEO.… pic.twitter.com/QRUZwXczAB
The Dow Jones Industrial Average settled at 52,156.20, down 140.89 points or 0.27 percent. The Russell 2000 moved to 2,784, representing a 0.51 percent loss following the previous day’s 1.66 percent slide that brought it to 2,799.06.
Moving within a session bracket of 7,499.40 to 7,621.78, the Standard and Poor’s 500 gave up 30.62 points to close at 7,561.78, marking a 0.40 percent reduction. The Euronext 100 Index dipped 1.58 points to 1,921.96, down 0.08 percent, within a range of 1,917.67 to 1,926.93.
Trading on a volume of 4.28 billion, mainland China’s SSE Composite Index dropped 21.48 points to 3,634.35, representing a 0.59 percent decrease. S&P 500 futures declined 0.16% to trade near 7,600. Nasdaq 100 futures fell 0.30% to trade around 28,300.
Once again, US equity markets are demonstrating very impressive resilience. After the earlier Nvidia-led selloff, all three major indices rebounded and are currently trading higher for the day. (CNBC data below.) #economy #markets #nvidia #investors #investing pic.twitter.com/4W6t88capZ
Nvidia Searches for Permanent Successor Amid Interim Leadership
Nvidia’s board is searching for a permanent successor both internally and externally. The Financial Times reporting said that the board approached British chipmaker Arm Holdings CEO Rene Haas.
Chief Financial Officer Colette Kress stepped in as interim CEO. She has served at the company for more than a decade.
“What are the relationships going to be with their suppliers and with their customers? It’s just early days,” said Thomas Martin, senior portfolio manager of Globalt Investments.
Lot of dip buying in the 2x Nvidia ETF.. the more it goes down the more they put in. Also, it was another all-in equity buying spree across ETFs past two days. $13b came in yest, all but one of top 20 was equity. pic.twitter.com/riTuu7noib
Martin also said that the process of finding a new chief executive officer would “take a lot of time” and generate additional uncertainty.
Companies linked to the artificial intelligence financing chain also declined.
Wholesale Inflation Grows While Federal Reserve Officials Signal Rate Hikes
Equities initially rose after the Labor Department released its producer price index report for October, CNBC reported.
The report showed a 0.3 percent monthly increase. That fell below the 0.4 percent forecast by economists polled by Dow Jones.
Annual wholesale inflation accelerated to 6.5 percent from 12 months earlier, marking the largest annual advance since November 2022, Reuters reported.
San Francisco Federal Reserve President Mary Daly said on Friday that her bias is toward increasing the policy rate. Boston Federal Reserve President Susan Collins said that tighter monetary policy is approaching due to high inflation, according to Reuters.
Major U.S. Averages Finish the Week Higher
Major U.S. averages finished the week higher despite Friday’s losses. The Nasdaq gained 2.3 percent, the S&P 500 rose 2.5 percent, and the Dow added 2.1 percent, CNBC said.
Earlier coverage: US Stock Futures Rise as Tech and AI Shares Recover From October Selloff