S&P500, Nasdaq end lower as Nvidia uncertainty weighs on tech shares

On Friday, the S&P 500 and Nasdaq both closed lower as Nvidia's declining shares weighed on technology stocks, while inflation data failed to change expectations for more rate hikes from the Federal Reserve. Nvidia's shares dropped 2% after CEO Jensen Huang's resignation following extramarital affairs revelations, including a relationship with a suspected Chinese spy.

Nvidia's board reportedly considered British chipmaker Arm Holdings CEO Rene Haas as a potential replacement. This leadership uncertainty has raised concerns about the AI trade's sustainability, given Nvidia's central role in the industry's growth and its financial ties to numerous companies in the sector. Anthony Saglimbene, chief market strategist at Ameriprise Financial, stated that the market and investors are navigating a period of volatility for AI, with a loss of confidence since Huang's departure.

Despite the tech sector's decline, other indexes recorded weekly gains, with the S&P 500 up 2.51%, the Nasdaq 2.27%, and the Dow up 2.07%. The S&P 500 technology index was the worst-performing of the 11 major S&P sectors, but Microsoft recovered slightly after a global outage affecting its Outlook and Teams products.