Wall Street ends mixed as Nvidia turmoil weighs on tech, but indexes post best week since August
U.S. stocks closed mixed on Friday as Nvidia's worst week since last April dragged technology shares lower, even as the major indexes recorded their best week since August and investors weighed fresh inflation data.
Wall Street closed out a turbulent week on a mixed note on Friday, as a deepening sell-off in Nvidia shares dragged technology stocks lower while blue-chip shares edged higher, leaving the major indexes with their best weekly gains since August despite the downbeat final session. The Dow Jones Industrial Average rose 50.46 points, or 0.1 percent, to 52,347.55. The broader S&P 500 fell 30.73 points, or 0.4 percent, to 7,561.67, and the technology-heavy Nasdaq Composite dropped 229.82 points, or 0.9 percent, to 25,136.27. The Nasdaq 100, dominated by the largest growth companies, lost 1.2 percent, and the small-cap Russell 2000 also fell 1.2 percent.
The split finish captured a market rotating rather than retreating. Six of the S&P 500's 11 sectors ended the day in positive territory, led by consumer staples, the classic defensive refuge when investors grow nervous about growth. Information technology was the weakest sector by a wide margin. Airline shares slipped modestly after the Federal Aviation Administration ordered a rare nationwide ground stop on Friday afternoon over a communications problem at air traffic control centers, a reminder of how quickly operational shocks can ripple through sentiment.
Nvidia's worst week since last April
The day's dominant story remained the turmoil at Nvidia, the chipmaker at the center of the artificial intelligence boom. Nvidia shares have fallen about 13 percent this week, their worst weekly performance since April last year, after chief executive Jensen Huang resigned on Thursday amid a widening scandal. The slide pulled the company's market value back below $4 trillion and reverberated across the semiconductor industry: the VanEck Semiconductor ETF and the iShares Semiconductor ETF each fell between 3 and 3.6 percent on Friday, while the broader Vanguard Information Technology ETF lost 1.7 percent. AI infrastructure name CoreWeave dropped 6.1 percent, even as software company AppLovin advanced 3.9 percent.
Investors are now watching Nvidia's board as much as its business. The Financial Times reported that Rene Haas, the chief executive of chip designer Arm Holdings, has been approached about replacing Huang; Haas has led the SoftBank-backed company since 2022 and spent roughly seven years at Nvidia earlier in his career. Strategists say the company's results, due on November 17, matter more than the succession drama. "The next real test arrives when Nvidia reports on November 17, and the thing to watch is not who is at the podium but whether the order book has changed," Brian Jacobsen of Annex Wealth Management told Bloomberg.
Inflation data does little to calm rate-hike bets
Fresh inflation figures gave investors little relief. The Labor Department's producer price index rose 0.3 percent in October, slightly below the 0.4 percent increase economists had expected, and core producer prices, excluding food and energy, also advanced 0.3 percent. But the details were less comforting: September's increase was revised up to 1.4 percent, and producer prices were 6.5 percent higher than a year earlier, the sharpest twelve-month rise since November 2022. Coming after consumer price data earlier in the week that also ran above forecasts, the report did little to change expectations that the Federal Reserve could raise interest rates further.
Bond markets reflected that caution. The yield on the benchmark 10-year Treasury note hovered near 5.14 percent, the two-year yield eased 2 basis points to 4.86 percent, and the 30-year yield pushed up to 5.47 percent. Yields at those levels raise the hurdle for richly valued growth stocks, whose expected earnings stretch far into the future, and help explain why technology shares lagged even as industrial and consumer names held up. For many portfolio managers, Friday's trade was less about panic than about pricing in a longer period of expensive money.
The weekly picture looks very different
Stepping back from the daily moves, the week told a far stronger story. The S&P 500 gained about 2.5 percent over the five sessions, the Nasdaq Composite rose about 2.3 percent and the Dow added about 2.1 percent, as all three recovered from the sharp spike lower seen the previous week. It was the market's best week since August. One analyst at Cestrian Capital Research advised battered investors to take a deep breath and switch their charts to a weekly view, arguing that the considerable rebound from last week's lows would reward patience.
The calendar ahead is crowded. Nvidia's earnings on November 17 will test whether demand for AI computing is intact, and Anthropic's highly anticipated initial public offering is expected to list on November 19, giving public investors a new way to bet on the technology. December's Federal Reserve meeting looms beyond that. After a week in which the market absorbed a corporate earthquake at one of its most valuable companies and still finished higher, investors appear willing to keep buying — but with technology on a much shorter leash than it enjoyed a month ago.
