Nasdaq 100 jumps 3.4% in biggest daily gain since late March
Key Facts
The Nasdaq 100 rose 3.4% on Monday, November 9, its biggest daily gain since late March and its second-best performance of the year, according to Axios. The advance came in a session when gains broadened across technology and AI stocks, despite a decline in Nvidia shares amid an independent investigation announced by the company into reports concerning its CEO. The S&P 500 rose 2.3% to 7,549.94, while the Dow Jones gained 2.2% to 52,389.75, according to The Associated Press. The agency noted that a 5.8% drop in Brent crude helped lift the market as inflation concerns eased. The moves came as investors tracked capital spending outlooks from major cloud computing companies, which had appeared relatively steady before the Nvidia news and opposition vote concerning data centers.
Chip stocks were among the session’s strongest drivers, with the SOX index up 6.9%, its biggest gain since late July, according to Axios. Broadcom shares jumped 8.8%, their best day in about a year. Meta rose 5.1% among the major cloud computing companies. AMD shares gained 13.3%, also benefiting from Oppenheimer analysts upgrading the stock to "outperform" on Sunday. Axios described the analysts’ recommendation as equivalent to "buy," combining the upgrade with a broad rally in chip stocks. Gains also extended to engineering and construction companies and data center suppliers, from fiber-optic cable producers to servers and data storage equipment.
Nvidia, meanwhile, said on Sunday that it had opened an independent investigation into reports that its CEO was "the target of a foreign intelligence effort," according to The Associated Press. Jensen Huang had acknowledged an intimate relationship with an executive, but the company linked its announcement of the investigation to the reports about that intelligence effort. Nvidia’s board said it saw no reason to believe national security or company secrets had been compromised, adding that the investigation would examine the available information. The company confirmed that Huang would remain CEO. Its spokesman, John Rizzo, said "today’s news will not slow Nvidia down" and that Huang was committed to continuing to lead the company without interruption. The statements said there was no evidence of a breach, while the investigation remained ongoing.
The reactions extended to Beijing and Washington, with China’s foreign ministry describing the espionage allegations as a smear campaign against Beijing, according to The Associated Press. U.S. President Donald Trump said the FBI was looking into the case. He added that Huang had told him he did not know the woman he was linked to was a spy. In a market assessment, Goldman Sachs analysts wrote on Monday that they believed stocks had clearly entered oversold territory. Morgan Stanley analysts also viewed the market’s reaction to the midterm elections as overdone, Axios reported. The rally thus coincided with assessments that stocks had come under pressure, as investors continued to follow developments in the Nvidia investigation.
As for the case’s impact on Nvidia’s business, analysts said a lengthy investigation or internal review could delay the company’s investment decisions or product launches, with the effects potentially extending to the semiconductor industry, according to Reuters. South Korea offered an indication of the supply side: its deputy science minister said the government did not expect disruption to deliveries of Nvidia graphics processing units that had been contracted. The company’s earnings announcement, scheduled for November 17 after the market close, was the next near-term event for investors, according to Investing.com. On the following day’s agenda, Reuters listed U.S. consumer price data for October and small business optimism indicators. These dates placed the company’s results and developments related to the investigation among the main items investors were tracking after the rebound session.