What to Know
- Nvidia was down about 4% after falling more than 10% earlier, with weakness tied to fallout from a scandal and the resignation of CEO Jensen Huang.
- Advanced Micro Devices and Broadcom gained 4% and 5%, respectively, suggesting some investors were rotating into Nvidia competitors.
- The recovery in the major indexes indicated that investors may be treating the Nvidia event as important, but not necessarily market-defining.
- Oil prices and Treasury yields rose as traders reacted to renewed concerns involving Iran and comments from President Trump.
- Higher oil prices could keep inflation concerns alive and complicate expectations for Federal Reserve policy.
- Initial jobless claims jumped last week after hovering near their lowest levels in decades, putting labor market signals back in focus.
- The Nasdaq Composite remained in a main downtrend on the daily swing chart, with 26048.83 needed to turn the main trend up.
- For the S&P 500, technical traders are watching 7655.75, 7671.89, 7715.57, 7758.43 and 7770.40 as key upside levels.
Tech Shares Stabilize After Nvidia-Led Weakness
The S&P 500 and Nasdaq recovered from earlier pressure as selling in Nvidia eased and investors showed willingness to buy other large technology and semiconductor names. The session began with risk appetite under strain after Nvidia dropped more than 10% at one stage, but the chipmaker later pared that decline to about 4%. That shift helped reduce some of the immediate stress across growth stocks and allowed the major indexes to move off their weaker levels.
The central issue for equity traders was the fallout from a scandal at Nvidia that led to the resignation of CEO Jensen Huang. Nvidia has been a major influence on market sentiment because of its central role in the artificial intelligence trade, and some investors may have attached a meaningful premium to Huang’s vision and leadership when assessing the company’s valuation. Without him at the helm, market participants are reassessing whether the same confidence should be applied to the stock and to the broader AI complex.
Even so, the market reaction was not limited to broad selling. Instead, some investors appeared to rotate toward competitors that could benefit if Nvidia’s dominance is questioned. Advanced Micro Devices traded higher by 4%, while Broadcom gained 5%. Those gains suggested that buyers may still want exposure to semiconductor and AI-related themes, even if they are reducing concentration in Nvidia itself.
Rotation Into AMD and Broadcom Signals Selective Risk Appetite
The gains in Advanced Micro Devices and Broadcom were significant because they pointed to a more selective response from investors. Rather than abandoning the technology sector entirely, some traders appeared to look for alternative beneficiaries within the chip industry. That matters for the S&P 500 and Nasdaq because the broader market has relied heavily on large technology companies and AI-linked stocks for leadership.
If investors continue to view artificial intelligence as a long-term driver, weakness in one major company may create opportunities elsewhere rather than trigger a full retreat from the sector. At the same time, the Nvidia event could still pressure valuations if traders decide that leadership risk, governance concerns or uncertainty around strategic direction should be reflected in share prices. For now, the recovery in the major indexes suggests that investors may believe the market is bigger than the Nvidia shock.
That does not mean the risk has disappeared. Nvidia’s role in index performance and investor psychology remains substantial, and a sustained move lower in the stock could still weigh on sentiment. However, the rebound in the S&P 500 and Nasdaq showed that dip buyers were prepared to defend the broader market when selling pressure moderated.
Oil, Yields and Inflation Concerns Add a Macro Layer
Beyond technology stocks, investors were also focused on oil prices, Treasury yields and renewed concerns involving Iran. Treasury yields rose along with oil prices after President Trump said, “We don’t need a deal with Iran. Those days have long since passed. We’ve got their money. Hundreds of Billions of Dollars, and we’ve got their Strait.” The comments added another geopolitical element to a market already dealing with questions about corporate leadership, inflation and monetary policy.
Higher oil prices can affect the equity market through several channels. They can weigh on economic growth by raising energy costs for businesses and consumers. They can also keep inflation pressures alive, especially when investors are already sensitive to any sign that price pressures may be difficult to contain. If inflation remains sticky, the Federal Reserve could stay more hawkish for longer, keeping interest rates elevated.
That backdrop is especially important for growth and technology shares. Higher rates tend to make Treasurys more attractive relative to equities, and they can reduce the present value investors are willing to pay for future earnings. The issue is particularly relevant for AI-linked companies that may need substantial capital to finance large datacenters. If financing conditions become more expensive, the market may become more selective about which companies can justify high valuations.
Jobless Claims Put the Labor Market Back in Focus
Economic data added another layer to the session, as initial jobless claims jumped last week after hovering around their lowest levels in decades. The increase drew attention because the labor market has been an important factor in shaping expectations for Federal Reserve policy. A resilient labor market can give policymakers more room to keep policy tight, while signs of weakness may limit the central bank’s ability to raise rates aggressively.
For equity traders, the jobless claims data creates a mixed signal. On one hand, a softer labor market could eventually support expectations for less restrictive policy. On the other hand, investors do not want to see weakness that raises concerns about economic growth. The market is therefore trying to balance inflation risks from higher oil prices against the possibility that labor conditions may be losing momentum.
This mix helps explain why the recovery in stocks remains tentative rather than decisive. Buyers stepped in after early weakness, but the macro picture remains complicated. Oil, yields, inflation expectations and labor data are all capable of influencing whether the S&P 500 and Nasdaq can extend their rebound or slip back into defensive trading.
Nasdaq Technical Picture Remains Fragile but Improving
The Nasdaq Composite was trading slightly better on Thursday after recovering from earlier weakness. From a daily swing chart perspective, the main trend remained down. Technical traders are watching 26048.83 as the level that would change the main trend to up, while a move through 24262.14 would signal a resumption of the downtrend.
The minor trend was also down, but the setup had improved after buyers stepped in. A trade through 25649.85 would change the minor trend to up and shift momentum toward the upside. That level is important because it could show that the rebound is not merely a short-covering move, but a more durable attempt to repair the chart.
Key Nasdaq support is found in the short-term retracement zone from 24956.00 to 24792.25. If that zone fails, sellers could regain control and challenge the recovery attempt. On the upside, the main target is the retracement zone from 25992.45 to 26400.80, with the 50-day moving average at 26381.36 also becoming a target if momentum strengthens.
Some chart watchers shifted their bias to the upside earlier when buyers supported the index at the 200-day moving average at 25130.74. Holding that level remains important. A failure there would shift attention back to downside risk, while a breakout above 25649.85 could encourage a move toward higher resistance.
S&P 500 Levels Traders Are Watching
The S&P 500 also showed signs of improving momentum despite the broader downtrend on the main swing chart. Technical traders are focused on whether buyers can overcome the 61.8% level at 7655.75 and the 50-day moving average at 7671.89. A move through those levels could strengthen the bullish case and potentially trigger an acceleration to the upside.
If that happens, the main tops at 7715.57, 7758.43 and 7770.40 become the primary upside targets. A move through 7715.57 would change the main trend to up, while moves through 7758.43 and 7770.40 would confirm the change. These levels could determine whether the current rebound becomes a broader recovery or remains a limited bounce within a still-cautious market structure.
On the downside, a break back under the 50% level at 7597.44 would weaken the outlook. It could also trigger a move under the minor bottom at 7550.84. If that occurs, some market participants could shift back toward a bearish bias, especially if Nvidia resumes selling pressure or macro concerns intensify.
Market Outlook: Rebound Needs Confirmation
The recovery in the S&P 500 and Nasdaq shows that investors are not abandoning risk assets outright, even after a sharp Nvidia-driven shock. The rally in Advanced Micro Devices and Broadcom reinforces the idea that buyers may still have appetite for semiconductor exposure, provided they can find names that appear less directly affected by the Nvidia leadership change.
Still, the rebound needs confirmation. For the Nasdaq, the market needs to hold the 200-day moving average at 25130.74 and build momentum above 25649.85. For the S&P 500, buyers need to clear 7655.75 and 7671.89 before the larger upside targets become more convincing. Without those moves, the market could remain vulnerable to renewed selling.
Macro conditions will also matter. Rising oil prices, higher Treasury yields, lingering inflation pressure and the latest jump in jobless claims create a complex backdrop for equities. Investors may be willing to buy weakness, but they are likely to remain sensitive to any signal that interest rates could stay elevated or that economic growth may soften.
For now, the message from the market is cautious resilience. Nvidia’s decline has not fully derailed the major indexes, but it has introduced a fresh valuation debate around one of the market’s most important stocks. Whether the S&P 500 and Nasdaq can turn this rebound into a sustained move higher will depend on follow-through in technology shares, stability in Nvidia, and confirmation from the key technical levels now in focus.
Frequently Asked Questions (FAQs)
Why did the S&P 500 and Nasdaq recover after early weakness?
The indexes recovered as Nvidia pared a steeper decline and investors moved into other semiconductor names, including Advanced Micro Devices and Broadcom. That buying helped offset some of the pressure from Nvidia’s weakness.
What happened to Nvidia during the session?
Nvidia was down about 4% after falling more than 10% earlier. The weakness was tied to fallout from a scandal and the resignation of CEO Jensen Huang.
Why are AMD and Broadcom important to the market reaction?
Advanced Micro Devices rose 4% and Broadcom gained 5%, showing that some investors may still want exposure to chip and AI-related companies even while reassessing Nvidia.
What Nasdaq level would change the main trend to up?
Technical traders are watching 26048.83. A trade through that level would change the Nasdaq Composite’s main trend to up on the daily swing chart.
What are the key Nasdaq support levels?
The key short-term retracement support zone is 24956.00 to 24792.25. Traders are also watching the 200-day moving average at 25130.74 as an important level for the current rebound.
What S&P 500 levels matter on the upside?
Buyers are watching 7655.75 and the 50-day moving average at 7671.89. If those are cleared, the main tops at 7715.57, 7758.43 and 7770.40 become the primary upside targets.
Why are oil prices and Treasury yields relevant for stocks?
Higher oil prices can keep inflation concerns alive, while higher Treasury yields can make bonds more attractive relative to stocks. Both factors can pressure equity valuations, especially in growth and technology shares.
How do jobless claims affect the Federal Reserve outlook?
A jump in initial jobless claims may point to softer labor market conditions. If labor weakness grows, it could limit the Federal Reserve’s ability to raise rates aggressively, although investors will also watch whether it signals broader economic risk.
Is the current rebound confirmed?
The rebound has improved short-term sentiment, but confirmation depends on follow-through above key technical levels. If the Nasdaq fails to hold the 200-day moving average or the S&P 500 breaks back under 7597.44, downside risks could return.