US stocks little changed as Nvidia drop offsets energy gains
US equities were mixed on Thursday as a rise in oil prices boosted energy shares, but Nvidia's decline after CEO Jensen Huang's exit dragged on markets. The S&P 500 fell 0.13 per cent while the Nasdaq shed 0.27 per cent, with investors focused on AI regulation fears and upcoming inflation data.
US stocks were little changed on Thursday, with the S&P 500 and Nasdaq erasing initial declines as a rise in oil prices boosted energy shares, though Nvidia's decline after CEO Jensen Huang's exit weighed on the market. The chip company's shares were last down about 5 per cent, after earlier dropping nearly 12 per cent. Retail investors bought Nvidia shares worth about US$111 million in the first half hour of trading, the biggest opening bid on record for the stock, according to data from Vanda Analytics.
The S&P 500 energy index rose about 2 per cent as the best-performing of the 11 major S&P sectors. Crude prices climbed after President Donald Trump wrote on social media that the US did not need a deal with Iran. Global AI-linked stocks were trading lower as Nvidia Chief Financial Officer Colette Kress was tabbed as interim CEO, and AI cloud firm Nebius tumbled nearly 18 per cent after reporting its quarterly earnings and outlook. But Nvidia competitors such as Broadcom, Advanced Micro Devices, Alphabet and Amazon moved higher as the biggest boosts to the S&P 500.
Equities have been volatile in recent days. Sweeping Democratic victories in the US midterm elections have sparked investor concern about more AI regulation. Worries about Nvidia's leadership have also pressured one of the foundations of the current bull market. Jed Ellerbroek, portfolio manager at Argent Capital Management in St Louis, said: "Right now, the market is selling AI stocks and tech stocks and buying safe stuff, just like it did in the first halo trade in January and February of this year, but it will flip back." He described it as "a tug of war" between concerns about deceleration and the still-compelling absolute valuation and growth rates.
The Dow Jones Industrial Average rose 8.64 points, or 0.02 per cent, to 52,495.13; the S&P 500 lost 10.22 points, or 0.13 per cent, to 7,609.16; and the Nasdaq Composite shed 70.03 points, or 0.27 per cent, to 25,396.16. The Philadelphia Semiconductor index shed 0.5 per cent after rising 17.2 per cent over the prior four sessions. Along with Nebius, peer CoreWeave dropped about 7 per cent. Shares of data centre-related firms IREN and Applied Digital also slumped.
Investors are awaiting the release of the Producer Price Index on Friday, which will follow a hotter-than-expected consumer price reading earlier this week. Markets are completely pricing in a December rate hike of at least 25 basis points by the Federal Reserve, with a 15 per cent chance of an outsized 50-basis-point increase, according to CME FedWatch. Comments from multiple Fed officials earlier this week suggested the US central bank was open to a more aggressive path of rate hikes as price pressures worsen.
Even with Huang's departure, some investors expect questions to persist about the future of AI companies with strong ties to Nvidia. The company has backed several firms, including its own customers, through financing arrangements that face greater scrutiny after Huang's departure. Ellerbroek said: "Nvidia is the circular-funder-in-chief; they're the biggest by far at this point, and I assume that activity will moderate." Declining issues outnumbered advancers by a 2.8-to-1 ratio on the NYSE, and by a 2.87-to-1 ratio on the Nasdaq.