US stocks tumble as Nvidia slides 4.3%, triggering fresh selloff in technology shares

U.S. stock markets experienced a significant downturn on Friday amid fresh worries surrounding Nvidia, which in turn triggered a broader sell-off in technology shares. The tech sector faced additional pressure from October producer prices data that was less than expected. Nvidia's shares plummeted 4.3%, signaling their worst weekly loss since October 2012.

CEO Jensen Huang's resignation, prompted by scrutiny of his relationship with a businesswoman suspected of spying for Beijing, further exacerbated the situation. This volatility has raised concerns about the artificial intelligence (AI) trade, given Nvidia's pivotal role in the industry's growth and its financial connections to numerous companies within the sector.

The Philadelphia semiconductor index fell 6%, while Advanced Micro Devices and Broadcom experienced declines of 10% and 7%, respectively. Notable drops were also seen in Neoclouds CoreWeave and Nebius, each experiencing a 10% decrease. Data center-related firms IREN, Applied Digital, and Core Scientific also suffered losses between 3% and 9%.

The market's vulnerability was underscored by the imminent IPO of Anthropic, an artificial intelligence company, which could influence investor sentiment as funds might flow towards the newer entrant. Analyst Angelo Kourkafas at Edward Jones noted the potential for a reallocation of investment from established AI heavyweights to the new player.

The Dow Jones Industrial Average fell 122.12 points (0.23%) to 52,174.97, the S&P 500 dropped 76.88 points (1.01%) to 7,515.49, and the Nasdaq Composite declined 441.78 points (1.74%) to 24,923.79. Among the "Magnificent Seven," Apple and Meta were the only stocks to increase slightly, each by less than 1%. Microsoft suffered a 0.4% decline following a prolonged outage of Outlook and Teams.

The tech-heavy index was the most prominent decliner on the S&P 500, with a 3% drop. Six out of the 11 major S&P sector indexes also experienced negative performance. Meanwhile, October's Producer Price Index for final demand showed a slight decline, but was still 6.5% higher year-over-year, marking the highest annual increase since November 2022.

This inflationary trend added to the investor's unease. Despite the overall negativity, Cerebras demonstrated strength, surging more than 6% after raising its 2026 revenue forecast and securing a new customer in Microsoft. Strong earnings from select companies have temporarily alleviated market gloom, but investors remain cautious due to various risks, including geopolitical tensions and persistent inflation.

On the earnings front, 83.6% of the 450 companies in the S&P 500 that reported results surpassed expectations, according to Tajinder Dhillon, head of earnings and equity research at LSEG Data and Analytics. However, the market sentiment remains cautious due to various uncertainties.