Wall Street Update: Nvidia Shares Drop 12% in Pre-Market Trading Following CEO Jensen Huang’s Departure
US stock futures fell sharply on Thursday as Nvidia’s shares plummeted over 12% following the resignation of CEO Jensen Huang. This leadership change at the $4 trillion chipmaker has sparked a broader sell-off in artificial intelligence-related stocks, raising concerns about the sector’s stability amid ongoing funding uncertainties and regulatory scrutiny. Dow futures dipped 23 points, or 0.04%, to 52,555, while S&P 500 futures dropped 43.75 points, or 0.57%, to 7,596.75. Nasdaq futures led the decline, falling 352.25 points, or 1.24%, to 28,121.
Nvidia’s board convened on Wednesday to discuss Huang’s position after allegations surfaced regarding his personal conduct, including an affair with a Chinese businesswoman suspected of espionage. Reports also indicated he had an affair with a senior executive at Nvidia. This controversy has heightened concerns about the future of the company and the AI ecosystem Huang helped cultivate by directing Nvidia’s resources toward cloud providers and research laboratories. The company’s financing practices have also come under scrutiny for potential circular funding issues.
Other AI Stocks Fall Too
The sell-off extended to other AI-linked companies, with Oracle shares declining by 3%, Micron Technology dropping nearly 5%, and Intel falling more than 3%. Neocloud company Nebius saw a 13% drop in premarket trading despite reporting better-than-expected third-quarter revenue, as its guidance disappointed investors. In contrast, Advanced Micro Devices experienced a rise after receiving an upgrade from William Blair. In Hong Kong, Alibaba and Tencent fell 6.7% and 2.6%, respectively, amid fears that the US might restrict access to offshore data centers equipped with advanced processors. Meanwhile, Chinese domestic GPU makers gained traction as investors anticipated that Nvidia’s troubles could allow local suppliers to capture a larger market share.
Dollar, Bond Yields Add to Market Pressure
The developments surrounding Nvidia contributed to broader global market uncertainty. The dollar reached a 19-month high, while the US 10-year Treasury yield climbed back to 5% amid rising expectations of another Federal Reserve rate hike next month. The dollar has appreciated over 1.5% since stronger-than-expected US inflation data prompted a reassessment of interest rate expectations. According to the CME Group’s FedWatch tool, traders are now pricing in a 90% chance of a 25-basis-point rate hike, compared to a one-in-three chance of rates remaining unchanged a week ago. Brent crude oil prices also rose above $92 a barrel as tensions in the Middle East offset increasing regional output.
Nvidia in Focus
Following Jensen Huang’s departure, Nvidia’s Chief Financial Officer Colette Kress has been appointed as interim CEO. Kress, who joined Nvidia in September 2013, will lead the company while it searches for a permanent successor. Under her financial leadership, Nvidia’s revenue grew from $4.13 billion in the fiscal year she joined to $215.9 billion in fiscal 2026. Kress has frequently participated in the company’s quarterly earnings calls alongside Huang, discussing Nvidia’s financial performance and outlook. Investors are now looking ahead to Nvidia’s earnings report next Tuesday for further insights into the AI trade. Saxo Bank’s Chief Investment Strategist Charu Chanana noted that strong results could reaffirm the AI growth narrative, though governance concerns may persist.
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