Nasdaq tumbles and Nvidia reverses 3.9% lower as broadening chip rout traps Friday dip-buyers
Wall Street erased an inflation-fueled opening bounce Friday morning as Nvidia flipped from a 2.3 percent premarket gain to a 3.9 percent loss—joining steeper drops in AMD, Broadcom, and Cisco that dragged the Nasdaq-100 down nearly 2 percent.
NEW YORK — A relief bounce on Wall Street evaporated within 30 minutes of Friday’s opening bell as institutional selling swept back through semiconductor stocks, flipping Nvidia sharply into the red and trapping retail investors who had rushed in at a record clip to buy the artificial intelligence leader’s historic slump.
Stock futures had climbed ahead of the open after the Bureau of Labor Statistics reported at 8:30 a.m. ET that the Producer Price Index rose 0.3 percent in October—slightly cooler than the 0.4 percent monthly gain economists polled by Dow Jones had forecast. By late morning in New York, however, a benchmark gauge of major chipmakers had tumbled 4 percent, dragging the tech-heavy Nasdaq Composite down 1.45 percent and the Nasdaq-100 ETF lower by nearly 2 percent.
The S&P 500 retreated more than 0.8 percent even though a majority of non-technology constituents in the benchmark index traded higher—underscoring how heavily Nvidia’s roughly 7.6 percent weighting inside flagship index funds sways everyday retirement portfolios. The Dow Jones Industrial Average held near flat, slipping just 0.13 percent to 52,230.
Record retail inflows collide with institutional chip liquidation
Nvidia had climbed as much as 2.3 percent in premarket trading as individual brokerage accounts poured unprecedented buy orders into the stock following Thursday’s shock resignation of founder and chief executive Jensen Huang.
Once regular cash trading began, institutional funds used that early liquidity to pare semiconductor exposure across the board. Nvidia reversed course to fall 3.9 percent by 11 a.m. ET, leaving the shares down roughly 14 percent from last Friday’s close and more than 30 percent below their all-time peak as Senate Banking Committee lawmakers joined House panels in requesting testimony next month from Huang and Commerce Secretary Howard Lutnick over advanced chip export controls.
Unlike Thursday—when rivals rallied on hopes of capturing market share during Nvidia’s executive transition—Friday’s sell-off spared almost no major silicon name. Advanced Micro Devices plunged 7.51 percent and Broadcom dropped 5.00 percent, while networking giant Cisco Systems sank 5.37 percent as hardware gross-margin compression overshadowed its raised $9 billion AI infrastructure forecast alongside Cerebras’s Microsoft chip deal.
Bond yields above 5.15 percent keep pressure on high-multiple tech
Stubbornly high borrowing costs compounded the midday tech retreat. Despite October’s milder monthly wholesale inflation print, the benchmark 10-year U.S. Treasury yield ticked up another five basis points to 5.156 percent as bond traders braced for potential Federal Reserve rate tightening in December—the same rate surge that knocked Bitcoin below $69,000 in a $1.5 billion derivatives wipeout earlier in the session.
Market strategists warned that with semiconductor valuations resetting alongside multiyear highs in Treasury yields, dip-buyers stepping into volatile AI bellwethers may face turbulent swings through next week’s retail earnings and inflation updates.