U.S. Futures Fall as Nvidia Shares Drop 8.6% in After-Hours Trading
Key Facts
U.S. futures fell on Thursday as artificial intelligence stocks were hit by concerns about leadership at Nvidia, according to the Associated Press. The company’s shares fell 8.6% in after-hours trading on Wednesday, November 11, following reports that its board met to discuss the situation surrounding Chief Executive Jensen Huang. Reuters reported, citing a person familiar with the matter, that the board met to discuss removing Huang. The company did not immediately respond to a request for comment on the meeting, Reuters reported. The decline came in after-hours trading, while the available evidence did not provide verified figures for futures levels or the size of their decline.
The corporate story began days earlier, when Nvidia’s board announced on November 8 that it had opened an independent investigation following reports that a foreign intelligence agency had targeted Huang. The board said the investigation concerned those reports, without saying that its subject was Huang’s future at the company. On November 10, the independent directors said they had retained John Kim, a lawyer and former acting U.S. attorney for the Southern District of New York, and his law firm, Wachtell, Lipton, Rosen & Katz. The board said the assignment was intended to conduct a “thorough and independent” investigation. These steps highlight the corporate governance developments that reports linked to the share move and AI stocks.
Moves spread to other companies in the sector during trading around the close. Micron shares fell about 2% and CoreWeave shares dropped 6% after the market closed, Reuters reported. By contrast, AMD shares rose 4% and Broadcom shares gained 3% on November 12. The divergence shows that the pressure did not affect all semiconductor companies in the same direction during that trading. Nvidia shares closed at $173.73 on November 11, according to EL7 data.
Technology stocks fluctuated after a rising session on Wall Street on Wednesday, when the S&P 500 rose 1.3%, nearing a recovery of its losses since the U.S. midterm elections the previous week, Reuters reported. Nvidia’s after-hours decline therefore came amid a market move in which the broader index gained during the same session. On the board, Reuters said Nvidia has 11 directors and considers all of them except Huang independent. Its rules allow Huang to be removed “for cause or without cause” with the approval of a majority of directors. This rule provides the corporate framework addressed in reports about the board meeting, without itself establishing that a decision to remove him was made.
Against this backdrop, the U.S. consumer price index for all consumers rose 0.4% in October from a month earlier, after a 0.6% increase in September, according to the Bureau of Labor Statistics. The core index, which excludes food and energy, rose 0.3% in October. The unadjusted index level was 337.511 in October, with an unadjusted monthly increase of 0.2%. This is the October reading published for that month, not a reading for November 10. November CPI data are scheduled for release on December 10 at 8:30 a.m. Eastern time, according to the bureau.
Investors will soon turn their attention to the company’s quarterly results. The results are due on November 17, Reuters reported, giving the company an opportunity to present its financial performance and outlook after the board developments. That date puts Nvidia’s results and outlook before investors following volatility in its shares and those of sector companies. The company’s shares had lost more than 8% in extended trading after a report that it was preparing to remove Huang, Reuters reported. The agency added that market value could have fallen by about $600 billion since the investigation was announced if those losses continued; this is an estimate conditional on the decline continuing, not a confirmed final figure.