Minus 14%, then minus 4.3%: Nvidia loses its founder, and the market keeps its nerve

On Thursday Nvidia’s board announced that its co-founder Jensen Huang had resigned as chief executive with immediate effect, after days of reports about his private life, including an affair with a woman whom US authorities suspect of spying for China^1,5. Chief financial officer Colette Kress takes over on an interim basis while the company looks for a permanent successor¹. It is the kind of headline that is supposed to end a boom.

What the tape actually said. Nvidia’s shares fell as much as 14% during the session, the steepest such fall since the DeepSeek scare of 27 January 2025, according to CNBC TV18⁵. Dip buyers then arrived, and the stock closed down 4.3%^1,3. Its competitors rose: Advanced Micro Devices gained 5.9% and Broadcom 5.5%¹. The S&P 500 fell 0.35% to 7,592.40, the Nasdaq Composite 0.39% to 25,366.09 and the Dow 0.36% to 52,297.09¹. A semiconductor index ended only 0.5% lower¹. Reuters notes that after its slide from the 6 October record, Nvidia trades at about 12 times expected earnings, its lowest valuation since 2012¹.

“The market’s absorbed this reasonably well,” Peter Tuz of Chase Investment Counsel told Reuters, while adding that “there’s a lot that remains unknown”¹. That is about right. The money did not leave the industry; it moved down the street.

Friday morning in Asia. Seoul, Tokyo and Taipei, home to the region’s largest AI-linked companies, climbed between 1.3% and 3%, AFP reported, with SK hynix, Samsung, TSMC and Kioxia well up². At the Tokyo midday break the Nikkei 225 was up 1.6% at 61,816.72, the Kospi up 1.3% at 5,410.58 and the Shanghai Composite up 0.2% at 3,662.84, while Hong Kong’s Hang Seng was down 0.6% at 23,874.05². Seoul had opened 2.05% higher and drifted back before noon⁴. Bloomberg had the MSCI Asia Pacific index up 0.7%, led by Taiwan and South Korea³.

“There’s actually a modicum of certainty now that the leadership change has been confirmed,” Tim Waterer of KCM Trade told Bloomberg³. Markets dislike not knowing more than they dislike bad news; a resignation, however messy, is a known.

The quieter, heavier weight: rates. The bigger move on Thursday was not in a chip stock but in Treasuries. The two-year yield rose 13.96 basis points to 4.867%, its highest since 14 October, and the ten-year 11.58 basis points to 5.105%, after touching 5.1169%¹. Traders in fed funds futures price 29 basis points of Federal Reserve rate rises in December, Reuters reports, implying slim odds of a half-point move¹. Brent settled up $3.06, or 3.3%, at $95.82 a barrel after attacks on Saudi energy infrastructure and President Donald Trump’s comment that Washington does not need a deal with Iran¹. On Friday the sell-off reached Asian bonds: Japan’s ten-year yield rose seven basis points to 2.870% and Australia’s eight to 5.12%³.

Desk arithmetic: at Thursday’s close the gap between the US two-year and ten-year yields was about 24 basis points (5.105% minus 4.867%).

Why this matters more than the boardroom. A boardroom scandal touches the shareholders of one company. A higher discount rate touches every share, every mortgage and every company’s refinancing at once. “The macro underpinnings are the ones driving Treasuries right now,” TD Securities’ Gennadiy Goldberg told Bloomberg³. The dollar index rose 0.3% to 103.18 on Thursday, a fresh 19-month high, Reuters reports, and the dollar broke back above 160 yen for the first time since September^1,2.

Into Europe. Thursday ended with the pan-European index at 664.01, up 0.14% after an all-time intraday high of 666.58¹. At 03:59 CET, Euro Stoxx 50 futures were down 0.3%³. Futures for the S&P 500 were up 0.3% and for the Nasdaq 100 up 0.4% at the same point³. That is a mixed open in prospect, not a verdict.

For you. If you own a world index fund, Thursday showed both its weakness and its strength. The weakness is concentration: one founder’s private life can move a trillion-dollar line in your portfolio. The strength is that the same fund also holds the competitors and suppliers who invoice the same data centres. The orders are placed by companies, not by a chief executive’s reputation. The figures above are intraday snapshots and closes as reported; Friday’s European session had not begun at the time of writing. Nothing here is investment advice.