Nvidia plunges but tech shares rebound, oil prices slump
Oil prices fell 5% on hopes for diplomatic talks aimed at ending the US-Iran war.
On Monday, technology share prices rebounded slightly after a sharp decline last week, although gains were dampened by a significant drop in Nvidia shares. The decline in Nvidia's stock was attributed to a probe into its CEO, Jensen Huang, who is under investigation for an alleged affair with a woman suspected of being a Chinese spy. Additionally, oil prices fell by 5% as there were hopes for diplomatic talks to end the US-Iran conflict.
The technology sector experienced a significant drop in shares following the US midterm elections, where Democrats gained control of both chambers of Congress. This led to speculation that lawmakers might impose tighter regulations on tech firms. Despite this, the Nasdaq, a tech-heavy index, managed to add 0.9% to its overall value.
Analysts noted that the bounce back in equities was not solely due to the fall in oil prices; it was also a result of investors capitalizing on the losses experienced in the AI sector last week.
The Philadelphia Semiconductor Index, which includes major chipmakers and AI firms, saw a rise of 1.9%, but Nvidia's shares plummeted by more than 8% during early trading. Market observers believe that Nvidia is being penalized for Jensen Huang's personal scandal, which has introduced considerable uncertainty into the market. However, they do not expect this to lead to a systemic domino effect.
The investigation into Huang's affair with an individual believed to be linked to Chinese espionage has added to the stock's volatility. Earlier reports suggested that a Chinese executive, Alice Huang, who is not related to Jensen Huang, had been funneling information to Beijing via her relationship with the Nvidia CEO. Following the disclosure, Huang acknowledged to his employees that he had an affair and expressed regret to his family and the company.
Tech analyst Dan Ives from Yorkville Ives noted that the scandal would likely provoke congressional investigations and create an atmosphere of caution around Nvidia's stock due to Huang's significant influence on the company's strategy globally. China dismissed the allegations of espionage as "baseless." European stock markets also experienced a surge in afternoon trading, following gains across most of Asia. Meanwhile, the US dollar weakened against its main counterparts.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
