Nvidia Shares Tumble as CEO Jensen Huang Resigns

U.S. stock index futures rose on Friday as markets absorbed the fallout from Jensen Huang’s abrupt exit from Nvidia Corp.

Jensen Huang Resigns Amid Investigation and Share Price Volatility

Nvidia shares plunged nearly 12% at the open before recovering slightly after co-founder Jensen Huang resigned as chief executive with immediate effect, according to Proactive financial news. The board announced an investigation into Huang following revelations of an affair with a purported Chinese spy and an employee, KSL reported.

Bloomberg News reported that Nvidia has tapped an outside firm to conduct a search for potential successors to Huang. “In the near term, investors should expect significant volatility in Nvidia,” said Ken Mahoney at Mahoney Asset Management, as reported by TradingView.

Bloomberg News reported that the company tapped an outside firm to conduct a search for potential successors to Huang. While Nvidia Corp.’s management turmoil triggered a drop in its stock price, it ultimately encouraged investors to shift money into a wider array of equities. The company at the heart of the artificial intelligence boom tumbled 5% after Jensen Huang was ousted from his post, sending its market capitalization below $4 trillion.

Major Indexes Fall as Semiconductor Weakness Weighs on Wall Street

Wall Street closed lower on Thursday, with major indexes shedding 0.4%, as the semiconductor weakness weighed on sentiment. The S&P 500 dropped 27 points to 7,592 alongside the Dow Jones Industrial Average, which declined 189 points, or 0.4%, to finish at 52,297.

The Nasdaq composite sank 100.10 to 25,366.09. S&P 500 futures climbed 0.2%, Nasdaq 100 futures gained 0.1%, and Dow futures rose 0.2% by early Friday. “This market feels coil-sprung to go higher, which is seemingly the pain trade,” analysts at JPMorgan wrote in a research note.

Bullion faced renewed pressure, with gold dropping 1.29%—or $51.41—to settle at $3,941.35 per ounce, dragged down by an appreciating US dollar and growing expectations of additional interest-rate hikes by the Federal Reserve. Bullion dropped for the third straight session as hotter-than-expected inflation readings from the U.S. and hawkish remarks from central bank officials solidified expectations for a December rate hike.

BlackRock’s Rick Rieder said that higher than desired levels of inflation should keep the Federal Reserve in a stance of dissatisfaction, making a Federal Reserve Funds policy rate hike in December the base case for the market.

Earlier coverage: Nvidia Shares Slide as CEO Controversy and Inflation Hit Markets

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