Nvidia falls 5% premarket as independent probe opens; S&P 500 futures rise 0.7%
Key Facts
Nvidia shares fell about 5% in premarket trading on Monday, November 9, after its board announced an independent investigation into reports that CEO Jensen Huang was targeted in a foreign intelligence effort. Reuters estimated the company could lose about $250 billion in market value compared with its previous close if the decline continued. Meanwhile, S&P 500 futures rose 0.7%, Dow Jones futures 1% and Nasdaq futures 0.4%, according to the Associated Press. S&P 500 futures were up about 0.66% in a Reuters reading at 06:39 a.m. Eastern time, versus 1.06% for the Dow and 0.42% for Nasdaq 100 futures. The divergence followed a losing week for U.S. stocks, with technology shares under particular pressure, while the futures rebound brought some stability to premarket trading.
Nvidia said in a statement dated November 8 that a committee of independent directors would oversee the investigation with the assistance of independent outside legal counsel. The board said the review concerned reports that Huang had been the target of a foreign intelligence effort; the statement did not describe the woman mentioned in the reports as a spy or characterize the investigation as concerning a romantic relationship. The board said it "has no reason to believe that national security or Nvidia's secrets have been compromised." The company added that Huang supports the review and will cooperate. In Beijing, China's Foreign Ministry rejected the espionage allegations and called them a smear campaign against China, according to AP.
The decline puts the stock under pressure at a time when Huang's leadership remains central to the company's AI narrative. AP quoted an analyst as saying Nvidia's success is tied to Huang remaining CEO and that the management team has no seamless replacement for him. Analyst Daniela Hathorn said Huang's central role in Nvidia's success and in the broader investment narrative around AI makes even speculation about leadership uncertainty a source of concern for investors. According to Reuters, Huang owns about 3.6% of the company, and dozens of executives report directly to him within a relatively flat management structure. Nvidia acknowledged that the investigation could remain a near-term drag on the stock.
The stock's last close was $186.64 on November 6, up from $181.6 in the November 5 session, according to EL7 data. The S&P 500 rose 0.3% on Friday, November 6, but ended the week down 2.7%. Over the same week, the Dow Jones fell 0.9% and the Nasdaq 3.4%, according to AP. Despite the weekly losses, S&P 500 futures on November 9 were still 5.7% below the index's record high set the previous month. This context highlights the contrast between Monday morning's futures rebound and investors' caution over pressure on the technology sector and the investigation surrounding one of the largest companies in AI.
In energy markets, prices fell amid expectations that President Donald Trump would meet Qatar's prime minister at the White House on Monday, as Qatar had presented proposals to address U.S.-Iran differences over Iran's nuclear program, according to AP. The agency said Iran was reviewing the proposals submitted by the Qatari mediator. Hopes for negotiations to ease geopolitical tensions remained in view in trading, alongside rising U.S. futures. But the main focus for Nvidia shares remained its board's decision to investigate the reports concerning Huang, and the concern that could add about leadership continuity. The company's upcoming results also give investors a near-term milestone for assessing the stock's performance and market sentiment.
Attention then turns to the U.S. October Consumer Price Index release, scheduled for November 10 at 08:30 a.m. Eastern time, according to the Bureau of Labor Statistics. The index rose 0.6% month over month in September, after a 0.4% increase in August, and was up 3.7% over the 12 months ended in September. Nvidia's next milestone is its fiscal 2027 third-quarter results call on November 17 at 2 p.m. Pacific time. eToro analyst Josh Gilbert described the company's results scheduled for November 17 as the stock's "next real test." He said the investigation's effect on investor sentiment could change if it led to a change in leadership.