Wall Street spent Wednesday celebrating artificial intelligence, then watched the company at the centre of it lose its footing after the close. US shares rallied hard on strong numbers from CoreWeave and OpenAI, only for Nvidia to slide about 8 per cent in late trading after reports that its board was preparing to remove Jensen Huang, the founder who has run the business for 33 years. By breakfast in London, Nasdaq futures were in the red, Asia had lost its early swagger, and the dollar was still sitting near its highest level in about a year and a half. Add the first estimate of UK growth at 07:00 and a US bond market back at work after the holiday, and this is a morning where the story can change quickly.
The 60-Second Market View
The S&P 500 rose 1.31 per cent to 7,619.38 on Wednesday, the Nasdaq Composite gained 1.60 per cent to 25,466.19 and the Dow added 0.49 per cent. The Nasdaq 100 jumped 2.3 per cent, putting US tech on course for its best week since May, and the VIX volatility gauge fell about 10 per cent to 17.49. In London, the FTSE 100 closed up 0.78 per cent at 10,835.47.
The mood turned after hours. Nasdaq 100 futures are down about 0.9 per cent and S&P 500 futures about 0.35 per cent, while Dow futures are slightly higher because they are less exposed to chipmakers. In Asia, Hong Kong is down about 1 per cent, Taiwan has slipped more than 1 per cent and South Korea has given back its early gains, while Tokyo’s broader Topix is holding a modest rise. Brent crude is down around 1.5 per cent near $91, gold is just under $4,000 and sterling is near $1.3260.
What Happened Overnight?
The day session was all about AI demand. CoreWeave, which rents out Nvidia-powered computing capacity, surged about 25 per cent after an upbeat outlook calmed worries about its finances. OpenAI reported quarterly revenue of $10 billion, and Anthropic’s planned share listing was reported to be several times oversubscribed. Put together, it looked like proof that companies are still spending heavily on AI, and investors piled back in after last week’s sell-off.
Then the Nvidia story broke open. The Wall Street Journal reported that the board was preparing to oust Huang, minutes after The New York Times reported that he had a relationship with an executive who reported to him. That follows his admission on Sunday of an affair with a woman whom US intelligence reportedly suspects of spying for China, a claim Beijing denies. The board met on Wednesday evening, Bloomberg reported that it has hired an outside firm to identify candidates, and Semafor said some directors favour chief financial officer Colette Kress as interim chief executive. No decision had been announced at the time of writing.
The selling rippled through the AI supply chain. Micron and CoreWeave fell in late trading, as did Intel, Qualcomm and Arm. Rivals AMD and Broadcom moved the other way, up around 4 per cent and 3 per cent respectively, as some investors bet on customers splitting their orders. In Japan, producer prices rose 7.1 per cent from a year earlier in October, well above the 6.5 per cent expected, which matters for a Bank of Japan that is watching a weak yen push up import costs.
The Big Story: Nvidia Without Its Founder
Start with the facts. Nvidia is a roughly $4 trillion company whose chips power most of the world’s AI systems, and Huang is the only boss it has ever had. Under its bylaws, he can be removed by a majority of the board, and ten of its eleven directors are independent. The shares had fallen around 20 per cent since the first reports emerged at the end of October, and the late fall took them to a 52-week low.
Why does a governance row matter so much to the wider market? Because Huang is unusually central to how Nvidia works. He has said he has around 60 direct reports, and there is no obvious successor. Investors have paid a premium for the idea that Nvidia sets the pace of the AI build-out, from chip design to the deals that lock in customers. Take away the person who has driven those product plans and the market has to price a period of uncertainty, at exactly the moment the company is due to report results on 17 November.
There is a second layer. The spying allegation turns this from a boardroom drama into a national security story. US senators Elizabeth Warren and Chris Coons have asked the Commerce Department and the White House to preserve records on exports of Nvidia’s advanced chips to China. Any sign that export rules could tighten would hit sales expectations as well as sentiment.
The market reaction shows how investors are thinking. Selling Nvidia while buying AMD and Broadcom suggests the AI spending story itself is not being questioned, only who captures the money. That is an important distinction. If Asia’s chipmakers, which supply Nvidia, hold up reasonably well today, the market is treating this as a company problem rather than an industry one. If TSMC, SK Hynix and Samsung slide together, the fear is bigger.
What to watch: an announcement from the board, the size of Nvidia’s fall when US trading opens at 14:30 UK time, and whether the wider Nasdaq can absorb it. Nvidia is such a large part of the major US indices that a heavy fall can drag the S&P 500 lower even if most other shares rise.
FX
The dollar index is near 103, holding onto the jump that followed Tuesday’s hotter US inflation figures, which strengthened bets on more Fed rate rises. Sterling has slipped to about $1.3260 and the euro to around $1.1080. The yen is trading near 159.70 per dollar, close to the 160 area where Japanese officials have stepped in before. Today’s UK growth figures give sterling a chance to find its own story, but the dollar has been setting the pace all week.
Equities
European stocks look set for a mixed start, with Euro Stoxx 50 futures slightly higher. London has its own full diary of company news, with results or updates due from Burberry, B&M, WH Smith, Wizz Air and Premier Foods, among others. Burberry is the one to watch as a gauge of global luxury demand after a difficult couple of years. The FTSE 100’s relatively small exposure to big tech has helped it this week, and that could cushion it again if the Nvidia story weighs on US markets.
Bonds
The US Treasury market reopens fully today after Wednesday’s Veterans Day holiday. The ten-year yield is just under 5 per cent and the two-year about 4.77 per cent, up sharply since Tuesday’s inflation data. The government sells $25 billion of 30-year bonds this evening, a useful test of investor appetite for long-dated debt at these levels. In the UK, the ten-year gilt yield is around 5.23 per cent and the two-year near 4.90 per cent, after the Bank of England raised its main interest rate to 4 per cent last week.
Commodities
Oil is giving back Wednesday’s gains. Brent settled at $92.76 after Iran’s security chief said the country would keep its enriched nuclear material at home, a stance that raised doubts about a deal. This morning it has slipped back towards $91, with investors still hoping the US and Iran can agree terms to reopen the Strait of Hormuz. Official US stockpile figures are due this afternoon, after industry data earlier in the week pointed to a large build. Gold slipped below $4,000 yesterday and has stayed there, weighed down by the strong dollar and higher yields, and silver is down about 1 per cent.
Today’s Economic Calendar
07:00 – UK GDP, third quarter first estimate – Economists expect growth of 0.7 per cent on the quarter, up from 0.5 per cent. A strong figure supports the case for another Bank of England rate rise in December, but September alone is expected to be flat.
07:00 – UK industrial production and trade, September – Forecasts point to a fall in factory output, which could show the economy losing pace at the end of the quarter.
Morning – Burberry, B&M, WH Smith and Wizz Air updates – A gauge of luxury spending, discount retail and travel demand.
09:00 – ECB Economic Bulletin – Background on how the European Central Bank sees growth and inflation.
13:30 – US weekly jobless claims – Forecast around 195,000. A low figure keeps pressure on the Fed to raise rates.
14:30 – US stock market opens – The first real test of Nvidia’s fall and the rest of the AI trade.
15:00 – US existing home sales, October – Shows how higher mortgage rates are hitting the housing market.
17:00 – US official oil stockpiles – Could decide whether Brent holds above $90.
18:00 – US 30-year bond auction – Weak demand would push long-term yields higher.
Afternoon and evening – Fed speakers Hammack, Barr, Goolsbee, Daly, Schmid and Williams, plus ECB President Lagarde – Any hint about the size of a December move will matter.
Levels Traders Are Watching
These are reference points, not predictions. For the S&P 500, the 7,500 area is the round number below Wednesday’s close. For the US ten-year yield, 5 per cent remains the line that has unsettled stocks each time it has been crossed. Brent’s $90 area is support after brief dips below it this week. Sterling’s $1.32 to $1.33 area has been the floor of its recent range, the yen’s 160 area is where intervention risk rises, and gold’s $4,000 area has turned from support into a hurdle to win back.
Where This Leaves Us
The AI trade has real support underneath it, from CoreWeave’s outlook to OpenAI’s revenue, but it now has a serious leadership question hanging over its most important company. Markets can live with bad news. They struggle with uncertainty, and an Nvidia board deciding the future of its founder days before results is about as uncertain as it gets. Add a strong dollar and a Fed that may raise rates again in December, and the bar for a clean rally today is high.
The view would improve if the board acts quickly with a credible interim leader and Asian chip suppliers stabilise, as that would suggest the damage is contained to Nvidia. It would worsen if export concerns grow or the selling widens to the wider chip sector when New York opens. The markets to watch are Nasdaq 100 futures, Nvidia, sterling around the GDP release, the US ten-year yield and Brent. For beginners, the lesson is that a single company can move a whole index when it is big enough, so check what is actually driving a market before assuming everything is falling for the same reason.
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