Stocks started the week with a bang as bargain hunters swooped in following last week’s broad-market thumping. Monday’s impressive gains came even as Nvidia ( NVDA ) — one of the world’s biggest companies by market cap — plunged on reports that the artificial intelligence chipmaker’s CEO, Jensen Huang, is being investigated over his relationship with a woman suspected of being a Chinese spy.
At the close, the blue-chip Dow Jones Industrial Average was up 2.2% at 52,389 and the broader S&P 500 was 2.4% higher at 7,549. The tech-heavy Nasdaq Composite gained 2.7% to 25,253, exiting correction territory . This is the first time since April 5 that all three benchmarks have surged 2% or more in the same day, according to Dow Jones Market Data.
Stocks sold off sharply last week on concerns that incoming Democratic leadership in Washington and several states, from Texas to Ohio, will create headwinds for the data center buildout.
Many of last week’s biggest losers saw impressive gains today, including memory stocks Micron Technology ( MU , +6.3%) and Sandisk ( SNDK , +6.2%).
And Advanced Micro Devices ( AMD ) surged 13.3% after Oppenheimer analyst Rick Schafer upgraded the chipmaker to Outperform from Perform, the equivalents of Buy and Hold, respectively. “Management sees top line up >80% next year despite supply constraints,” Schafer says, while he anticipates data center revenue to grow 185% in 2027 on “robust” demand for high-performance compute.
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Caterpillar ( CAT ), meanwhile, whose generators help power data centers, plunged more than 10% last week but was up 7.2% today — making it the best Dow Jones stock .
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Nvidia stock plunges on Huang investigation
Nvidia, on the other hand, found itself at the bottom of the 30-stock index, sinking 4.3% on worries over what the investigation into Jensen Huang means for the AI bellwether.
Over the weekend, Huang acknowledged an extramarital affair, saying in an email to employees that they “deserve better” from him. “Leading NVIDIA is the privilege of my life,” wrote Huang. “My responsibility is to serve you and be worthy of your trust. I have fallen short of that responsibility. I am fully committed to NVIDIA and will work to earn back your confidence.”
Media reports indicate Huang’s relationship was with Alice Huang, an executive at a Singapore-based cloud company whom U.S. officials have classified as a Chinese spy.
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Given the potential national security risks, Nvidia’s board of directors said it is launching an independent investigation, one that “Jensen fully supports … and has committed to cooperating with it.”
The news has Wall Street wondering if Jensen Huang — widely considered one of the most influential figures in the AI industry — will be removed as CEO of Nvidia.
“Given Huang’s central role in Nvidia’s success and the wider AI investment narrative, even speculation about leadership uncertainty could unsettle investors,” says Daniela Hathorn , senior market analyst at Capital.com. “However, there is currently no confirmed indication that he will step down, and the controversy does not necessarily change the company’s underlying demand outlook.”
She notes that the bigger risks to Nvidia and its fellow tech stocks are “the combination of AI valuation concerns and the possibility of further Federal Reserve tightening.”
October CPI will shift the December rate-hike needle
According to CME Group FedWatch , futures traders are currently pricing in an 84% chance the Fed will raise interest rates by a quarter-percentage point when it meets next month. Tomorrow morning’s release of the October Consumer Price Index (CPI) will likely shift those odds.
“In the wake of a blowout jobs report and other signs of a resilient economy, the Fed is going to have little patience with inflation ,” says BeiChen Lin , senior investment strategist at Russell Investments. “Even a minor surprise could seal the deal on a December hike.”
In addition to the headline October CPI numbers, which will not include a year-over-year figure this time around due to last year’s government shutdown, Lin will be focused on “the breadth of inflationary pressures,” meaning how prices are rising across various sectors, goods and services. “That will play a key role in determining the path of future monetary policy decisions,” he explains.
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