Wall Street bounces back from AI sell-off, Nasdaq rallies over 3%, but Nvidia plunges 9% on Jensen Huang controversy

Wall Street recovered from an earlier AI-driven sell-off, with the Nasdaq rallying more than 3% in a broad rebound, while Nvidia shares fell 9% amid a controversy involving its chief executive, Jensen Huang. The divergence highlights a transmission channel that is idiosyncratic rather than macro: the broad index recovery reflects renewed risk appetite across mega-cap technology, whereas Nvidia's decline reflects company-specific repricing tied to leadership reputational risk and the sensitivity of its valuation to sentiment about AI demand. Nvidia, as a heavily weighted constituent of both the S&P 500 and the Nasdaq-100, carries outsized influence on index-level moves, so its drop partially offset gains elsewhere in the tech complex. Traders should watch for further detail on the controversy's scope and whether it affects customer, regulatory, or governance expectations, along with the next wave of AI-related capital expenditure guidance from hyperscale cloud customers, which will indicate whether the rebound in AI sentiment is durable.

The Nasdaq-100 (NDX) is the US large-cap tech benchmark. NDX is more sensitive to rate decisions than SPX because of longer-duration cash flows, and heavily concentrated in Tech/Comms names — mega-cap earnings season dominates price action.

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