Market Summary - November 12, 2026
Market sentiment is notably negative this morning, with the Nasdaq 100 down approximately 1% and the S&P 500 falling by 0.5%. The primary driver of this decline is a significant drop in Nvidia shares, which are down by 7.5%. Nvidia's stock is crucial as it constitutes over 10% of the Nasdaq 100 and about 5% of the S&P 500. The sell-off is attributed to reports indicating that Nvidia's board is considering removing CEO Jensen Huang from his position.
Nvidia's Crisis
The turmoil began when Huang admitted to an affair with Alice Huang, a woman suspected of having ties to Chinese intelligence. Further complicating matters, reports surfaced of another affair involving Kimberly Powell, Nvidia's Vice President of Healthcare. As a result, Nvidia's stock closed at USD 173.73 and is trading around 7.5% lower in pre-market trading. If these losses continue, Nvidia's market capitalization could drop below USD 4 trillion. Analysts have reacted by downgrading their ratings on the stock, with Bernstein moving to a market perform rating, Baird downgrading to neutral, and Morgan Stanley removing Nvidia from its top picks list.
Impact on Competitors
Competitors such as AMD and Broadcom are benefiting from Nvidia's crisis, with their stocks rising by 1-2% in post-market trading.
Political Ramifications
The situation also has potential political implications, as Nvidia may face government investigations regarding espionage concerns and the flow of its chips to China via Singapore.
Broader Market Trends
The Nasdaq 100 is now 9% below its peak in October, with its Forward P/E ratio dropping to around 17x, below the S&P 500's ratio of approximately 18x. Asian markets have also seen declines, with the Hang Seng down 1.2%, the Kospi down 0.6%, and the Nikkei 225 down 0.7%.
Monetary Policy and Economic Data
Expectations for interest rate hikes by the Federal Reserve are increasing, with markets fully pricing in a rate increase in December. Recent inflation figures have come in higher than expected, with the headline CPI rising by 0.4% month-over-month, compared to a projected 0.3%. Core CPI also exceeded expectations, rising by 0.3% against a forecast of 0.2%. Fed officials have expressed support for a potential 25 basis point hike in December, with some suggesting that a 50 basis point increase should be considered due to persistent inflation.
Commodity and Currency Markets
In the energy sector, Brent crude oil has rebounded slightly to USD 93 after dipping near a two-month low. WTI is also moving higher to USD 86.8. Meanwhile, gold prices are declining for the third consecutive session, trading around USD 3,960 per ounce, pressured by a stronger US dollar and rising expectations of Fed rate increases. The EUR/USD pair has fallen to its lowest level since May 2025, driven by expectations of Fed rate hikes and concerns over French public finances.
Conclusion
The market is currently navigating through a turbulent phase, primarily influenced by Nvidia's internal crisis and broader economic indicators. Investors are advised to stay informed about these developments as they could significantly impact market dynamics in the near future.