The S and P 500 slipped only 0.35 percent to close at 7,592, helped by gains in Nvidia rivals, on a day when the chipmaker stock fell as much as 14 percent at the open. The S and P 500 shrugged most of it off and closed down just 0.35 percent, a sign that investors treated the shock as a Nvidia problem first and a market problem second, at least for one session.
Why it matters
The split inside the market was sharp. Nvidia closed down 4.34 percent at 166.19 dollars after hitting a 52 week low, while Advanced Micro Devices jumped more than 7 percent and Broadcom rose about 2.8 percent in after hours trading. The Nasdaq Composite fell about 0.4 percent and the Dow lost almost 190 points, as the money moved from the company in crisis to its rivals.
The economic data added to the caution. Existing home sales slumped 5.5 percent to an annual rate of 3.75 million units, the lowest since 2010, and initial jobless claims rose by 9,000 to 200,000. Together, the reports describe an economy that is still growing but with households pulling back on the biggest purchases.
What happens next
The next test comes on Friday, when the October Producer Price Index lands at 8:30 a.m. Eastern Time. Economists expect a rise of 0.4 percent from September and 6.6 percent from a year earlier, and traders fully price a quarter point Federal Reserve rate hike next month. A hot reading would hit the same technology stocks that are trying to steady.
For now, the market has absorbed the shock without breaking. Whether that calm holds will be decided by the producer price data on Friday and by Nvidia earnings on Tuesday, when the company reports for the first time without Huang at the helm.
The next test comes on Friday, when the October Producer Price Index lands at 8:30 a.m. Eastern Time. Economists expect a rise of 0.4 percent from September and 6.6 percent from a year earlier, and traders fully price a quarter point Federal Reserve rate hike next month. A hot reading would hit the same technology stocks that are trying to steady.
