Reuters: S&P 500 and Nasdaq Close Lower as Nvidia Leadership Uncertainty Drags on Chip and AI Stocks
S&P 500, Nasdaq end lower as Nvidia uncertainty weighs on tech shares
Context
Nvidia's leadership crisis is now moving the wider market, raising questions about the durability of the AI trade days before its earnings and Anthropic's IPO.
Jensen Huang resigned as Nvidia CEO on November 12 and CFO Colette Kress became interim CEO. Nvidia shares fell more than 4% that day and kept falling on Friday, November 13. Reuters posted its market wrap on the close shortly after midnight Eastern time.
Deep dive
According to the Reuters report, the S&P 500 lost 0.40% to 7,561.67 and the Nasdaq Composite fell 0.91% to 25,136.27 on November 13, while the Dow Jones Industrial Average rose 0.10% to 52,347.55. Nvidia shares fell 2%, and Reuters says the stock recorded its sixth straight weekly decline, its longest streak since October 2012.
The Philadelphia Semiconductor Index fell 3.4%, with AMD down 8.8% and Broadcom down 4.8% as the biggest drags, Reuters reports. Neocloud providers CoreWeave and Nebius also fell, and data center firms IREN and Applied Digital lost 6.7% and 5.8%. The S&P 500 technology sector shed 1.7%, the worst of the 11 major sectors.
Reuters cites a Financial Times report that Nvidia's board has approached Arm CEO Rene Haas about succeeding Huang. Anthony Saglimbene of Ameriprise Financial told Reuters there has been "a loss of confidence" and that investors are working out what the AI theme looks like without Huang, who was willing to use Nvidia's balance sheet to fund AI expansion.
CNBC reported that HSBC downgraded Nvidia to hold, expecting the stock to languish until a permanent succession plan is set. Despite Friday's losses, the S&P 500 and Nasdaq both posted weekly gains, snapping four week losing streaks.
What to expect next
Nvidia's third quarter report on November 17 is the next big test, and investors will look for any word on succession and on the company's financing commitments to AI customers. Reuters notes that Anthropic's IPO next week could also test appetite for AI stocks. Watch whether the board's search, including the reported approach to Rene Haas, produces a permanent CEO, which HSBC says is what the stock is waiting for.