Global technology stocks staged a modest recovery on Monday after suffering heavy losses last week, although the rebound was overshadowed by a sharp decline in Nvidia shares following reports of an investigation involving its chief executive, Jensen Huang.
Oil prices also recorded a steep fall, dropping by more than five per cent as hopes grew that diplomatic efforts could help bring an end to the ongoing US-Iran war.
The recovery in technology stocks followed several difficult trading sessions for chipmakers and other companies associated with the artificial intelligence industry. Their shares came under pressure after last Tuesday’s US midterm elections, in which Democrats secured major victories in both chambers of Congress. The outcome raised concerns among investors that lawmakers could push for tighter oversight of major technology companies.
Despite those concerns, Wall Street opened the week on a positive note. The Nasdaq Composite, which has a strong concentration of technology companies, gained 0.9 per cent, while the Philadelphia Semiconductor Index climbed 1.9 per cent as investors returned to some of the sector’s biggest losers from the previous week.
Patrick O’Hare, an analyst at Briefing.com, said the improvement in market sentiment was driven not only by falling oil prices but also by investors looking for opportunities among technology stocks that had recently suffered significant losses, particularly those linked to artificial intelligence.
Nvidia, however, moved in the opposite direction. Its shares fell by more than eight per cent shortly after trading began in New York, making it one of the biggest casualties of the day’s market activity.
Investors appeared to be treating the situation surrounding Huang as a company specific concern rather than a wider threat to the technology industry. O’Hare said the uncertainty surrounding the chief executive had placed additional pressure on Nvidia shares, although the market was not yet showing signs of fearing broader consequences for other companies.
The controversy emerged after reports that Nvidia’s board would investigate whether Huang had been targeted as part of a foreign espionage operation. The development followed his admission that he had been unfaithful to his wife, for which he apologised to his family and employees in a message circulated on Sunday.
The New York Times had previously reported that US intelligence officials believed a Chinese executive connected to Megaspeed, a Singapore based data centre company, had been passing information to Beijing.
The executive, identified as Alice Huang, also known as Huang Le, was said to have developed a close relationship with Nvidia’s chief executive. She is not related to Jensen Huang, who is 63 and was born in Taiwan.
The reports have raised fresh questions about Nvidia’s leadership and its business relationships, particularly as the company remains one of the most influential players in the global artificial intelligence industry.
Nvidia is a leading manufacturer of advanced chips used to develop and operate artificial intelligence systems. Its importance to the technology sector has helped make it one of the world’s most valuable companies. Last year, it became the first company to reach a market value of $5 trillion.
Dan Ives, a technology analyst at investment bank Yorkville Ives, warned that the controversy could attract greater attention from US lawmakers and create further uncertainty around the company’s shares.
He noted that Huang plays a central role in Nvidia’s global strategy, making the situation particularly significant for investors. Ives also warned that the controversy could intensify scrutiny of the company’s chip sales to China, an issue that remains a major point of debate in Washington.
China, meanwhile, dismissed the allegations linking it to an alleged spying operation involving Huang, describing the claims as baseless.
Beyond the technology sector, European stock markets moved higher during afternoon trading, following gains across several Asian markets. The US dollar weakened against major international currencies.
At around 1430 GMT, the Dow Jones Industrial Average had risen 1.1 per cent to 51,858.65 points, while the S&P 500 gained 0.8 per cent to 7,438.80. The Nasdaq Composite was up 0.9 per cent at 24,792.85.
In Europe, London’s FTSE 100 advanced 0.7 per cent to 10,742.85, France’s CAC 40 gained 1.1 per cent to 8,225.88, while Germany’s DAX climbed 1.2 per cent to 26,134.77.
Asian markets delivered mixed results. Japan’s Nikkei 225 closed 2.3 per cent higher at 58,775.50, while South Korea’s Kospi fell 0.8 per cent to 5,018.85. Hong Kong’s Hang Seng Index slipped 0.1 per cent to 24,448.95, while Shanghai’s Composite Index added 0.3 per cent to close at 3,660.79.
In the energy market, Brent crude fell 5.5 per cent to $92.90 per barrel, while US West Texas Intermediate dropped 4.9 per cent to $86.34.
Currency movements showed the euro rising to $1.1197 from $1.1138 on Friday. The British pound also strengthened to $1.3416 from $1.3350, while the dollar weakened against the Japanese yen, falling to 157.95 yen from 158.46 yen. The euro edged up against the pound to 83.44 pence from 83.43 pence.
