U.S. stocks closed modestly lower on Thursday, with the major averages giving back an afternoon recovery as shares of Nvidia (NVDA) tumbled following the resignation of founder and CEO Jensen Huang. The chipmaker’s sell-off weighed heavily on the tech-heavy Nasdaq and the broader S&P 500, while gains in energy stocks and some of Nvidia’s chip rivals helped limit the damage. Investors also digested a softer batch of housing data and fresh comments from Federal Reserve officials ahead of key inflation figures due Friday.
What Moved Markets
By the close of trading, the Dow Jones Industrial Average fell 189.40 points, or 0.36 percent, to 52,297.09. The S&P 500 slipped 26.98 points, or 0.35 percent, to 7,592.40, and the Nasdaq Composite declined 100.10 points, or 0.39 percent, to 25,366.09.
The day was dominated by news out of Nvidia. Huang stepped down as CEO and as a member of the board with immediate effect following reports about his personal conduct, and the company named chief financial officer Colette Kress as interim chief executive. The S&P 500 and Nasdaq opened sharply lower, with the Nasdaq down about 1.5 percent early in the session, before buyers stepped in and briefly pushed all three indexes into positive territory. That rebound faded in the final hours of trading.
The Dow held up better than the other indexes for much of the day because it is price-weighted, meaning Nvidia carries far less influence on the blue-chip average than it does on the market-value-weighted S&P 500, where it accounts for roughly 6 percent of the index.
On the economic front, the National Association of Realtors said existing home sales dropped 5.5 percent in October to an annual rate of 3.75 million, the lowest level since August 2010, as mortgage rates continued to climb. Separately, initial jobless claims rose by 9,000 to 200,000 last week, slightly above economists’ expectations of 195,000. Cleveland Fed President Beth Hammack said she still supports raising interest rates to bring inflation down to the Fed’s 2 percent goal, but favors smaller, more gradual moves rather than an aggressive half-point increase. The yield on the 10-year Treasury note held near 4.99 percent.
Notable Movers
Nvidia (NVDA) fell about 5.8 percent to roughly $163.73 on heavy volume, after sliding more than 10 percent early in the session. The stock is now down more than 20 percent over the past month, with the company’s quarterly results due next week.
Advanced Micro Devices (AMD) jumped about 6.1 percent and Broadcom (AVGO) gained around 5.5 percent, as investors rotated into Nvidia’s competitors. AMD also announced a collaboration with PsiQuantum on quantum computing technology.
Keurig Dr Pepper (KDP) dropped about 6.8 percent after the beverage company announced a proposed public offering of common stock. Issuing new shares can dilute the ownership stake of existing shareholders.
Airline stocks came under pressure as oil prices moved higher amid tensions involving Iran, with United Airlines (UAL) down about 5.9 percent and Delta Air Lines (DAL) off about 5.2 percent. Refiners benefited from the same trend, with Valero Energy (VLO) rising around 4 percent.
Elsewhere, Apple (AAPL) touched a fresh all-time high during the session, its second new intraday high in a row this week.
Looking Ahead
Attention now turns to Friday’s producer price index, a measure of wholesale inflation that could shape expectations for a possible Fed rate increase at the December meeting. Investors will also be watching for further developments on Nvidia’s leadership search, as well as the company’s quarterly earnings report next week, which could set the tone for AI-related stocks heading into year-end.