Wall Street bounces back: NASDAQ, Dow Jones and S&P 500 jump over 2%; Nvidia slips 6% on scrutiny over Jensen Huang's alleged affair

The US stock markets bounced back sharply on Monday after a brief pause on Friday. Investors chose bargain hunting after a steep fall in the previous week. The US benchmark fell as much as 4.9% in the previous week after Democrats won the mid-term elections. Besides, investors also remained watchfull of inflation expectations for November. The headline CPI and PPI inflation is expected to be released later this week.

NVIDIA shares tumble 6%

Meanwhile, investors also focused on important developments surrounding Nvidia’s CEO, Jensen Huang. Nvidia shares fell as much as 6% on Monday and recouped partial losses to trade 3% lower at 9:40 pm IST. The company’s board of directors announced that its CEO, Jensen Huang, became the target of a foreign intelligence attempt.

Media reports claimed that the Nvidia founder had an affair with a Singapore data center company’s former executive and businesswoman, Alice Huang, who worked for China’s Ministry of State Security. Reports said that Megaspeed was a significant purchaser of AI chips and processors and bypassed restrictions on chips to China.

Besides this, reports also claimed that the operation was aimed at lobbying for lighter restrictions on China, which Jensen Huang succeeded in persuading Trump to do in 2025.

Meanwhile, Jensen Huang wrote an important message, in which he apologised to his wife, family and colleagues and promised to co-operate with investigative agencies.

The development comes as a major blow for the AI-related theme, which is facing headwinds from threats of increased scrutiny, overheated valuations, and calls for slowing down the development of generative AI models.

Inflation in focus

Investors will also closely watch the CPI and PPI headline inflation numbers scheduled to be released this week. The October CPI jumped to 3.7%, after remaining flat at 3.4% in the previous two readings. According to the Federal Reserve of New York’s Survey of Consumer Expectations, headline CPI inflation is expected to hit a three-year high of 3.9%.

Meanwhile, the CME’s Fedwatch tool now indicates an 82.2% probability of a 25 bps rate hike in the coming policy decision in December.

Top gainers and losers

Meanwhile, chip stocks witnessed a sharp bounceback on Monday as shares of Advanced Micro Devices (+11.4%), Marvell Technology (+9.6%), Seagate Technology Holding (+9.6%), Broadcom (+8.3%), Micron Technology (+6.2%), Qualcomm (+5.5%), and Intel Corporation (+3.4%) were among the top gainers.