“We would be a little circumspect about the bounce-back as there are some things changing at the margin,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.
Nasdaq-100 futures fell 0.97% early Thursday as chip giant Nvidia slid following reports concerning its executive leadership, Reuters reported.
S&P 500 futures dropped 0.37%, while Dow Jones Industrial Average futures rose 0.15%. Markets across Asia also retreated, with Japan’s Nikkei 225 falling 0.82%.
South Korea’s Kospi dropped 1.26% amid pressure on Nvidia suppliers Samsung and SK Hynix. Hong Kong’s Hang Seng index declined 0.82%, China’s CSI 300 slipped 0.19%, and Australia’s S&P/ASX 200 closed 0.07% lower.
Selling pressure intensified in extended U.S. trading after The New York Times reported that CEO Jensen Huang had an extramarital relationship with a company executive. The Wall Street Journal also reported that Nvidia’s board is preparing to remove Huang from his post.
Shares of the chipmaker dropped more than 8% in after-hours trading. The sudden drop contrasted with regular trading hours, where the Dow rose nearly 255 points, or 0.5%.
The S&P 500 advanced 1.3% during regular hours, and the Nasdaq Composite jumped 1.6%. CoreWeave’s post-earnings advance and a rebound in Nvidia drove those earlier gains.
Investors are weighing whether the artificial intelligence-driven rally has room to run amid ongoing macroeconomic challenges. Samana pointed to stubborn inflation, anticipated Federal Reserve rate hikes, higher long-term interest rates, political shifts in Washington, and rising data center regulations as key concerns.
“Lately, the stock market has been locked in a fierce battle between the hope of AI and the fear around interest rates and inflation,” said Callie Cox, director of investment strategy at Plancorp. “There doesn’t seem to be much in between, and something may have to give.”
Market participants are turning their focus to upcoming economic releases for clearer signals on inflation and the labor market. Initial jobless claims data is scheduled for release at 8:30 a.m. ET on Thursday, followed by existing home sales figures at 10 a.m. ET.
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