Wall Street withstands AI blues. What about an Nvidia shock?
SPY•Despite a sharp selloff in AI stocks and Nvidia’s CEO resignation, the S&P 500 is about 3% below its record high as gains in healthcare and consumer staples help offset technology losses. The equal-weighted S&P 500 is up nearly 5% since October 6.
1. Broader market holds up
The S&P 500 has fallen about 3% from its all-time high even as AI stocks have slumped. The Philadelphia Semiconductor Index dropped 12% on November 5, its second-biggest loss on record, and was nearly 40% below its June high. Nvidia shares fell as much as 14% on Thursday after CEO Jensen Huang resigned, leaving the stock about 40% below its October 6 high and more than $2 trillion in market value erased in a little over a month.
2. Rotation supports gains
The equal-weighted S&P 500 hit a record high last week and has gained nearly 5% since October 6, compared with an 11% gain for the benchmark so far this year. Since October 6, healthcare and consumer staples have risen 13.1% and 11.8%, respectively, while technology has fallen 13.7%. Seven of the index’s 11 sectors posted gains over that period.
3. Risks remain
JPMorgan analysts said recent deleveraging, reversals of crowded positions and liquidations across equity and quantitative funds have been unusually aggressive. Goldman Sachs’ sentiment and positioning indicator fell to its lowest level since April 2025. The article says Nvidia-related controversy, policy uncertainty around the new-look U.S. Congress and the prospect of more Federal Reserve rate hikes could keep pressure on AI stocks.
