US stocks traded lower on Thursday, with the Nasdaq Composite leading losses as a sharp selloff in Nvidia and other artificial intelligence-linked stocks weighed on investor sentiment. The Dow Jones Industrial Average, however, remained largely flat, offering some resistance to the broader market decline.
At 9:36 AM EST, the Nasdaq Composite was down 249 points, or 0.98%, at 25,217.188. The S&P 500 fell 44.74 points, or 0.59%, to 7,574.64, while the Dow Jones Industrial Average slipped 6.42 points, or 0.01%, to 52,480.07.
Nvidia was at the centre of Thursday's selloff after reports surrounding CEO Jensen Huang's departure rattled investors. The company announced Huang's resignation and named Chief Financial Officer Colette Kress as interim CEO. The development followed reports alleging that Huang had an affair with a Chinese spy.
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Nvidia shares fell 7.64% to $160.46, down $13.26, at 9:41 AM EST as investors reacted to the uncertainty surrounding the company's leadership.
The weakness extended beyond Nvidia, with several prominent names in the AI trade also facing selling pressure. Oracle shares dropped 4%, while Nebius plunged around 20% in premarket trading after its third-quarter revenue exceeded expectations but its forward guidance disappointed investors.
Some chipmakers managed to buck the trend. Advanced Micro Devices shares gained around 1%, while Broadcom advanced 4%, suggesting that investors were shifting towards select semiconductor stocks even as the broader AI trade came under pressure.
Adding to Wall Street's concerns, crude oil prices moved higher after US President Donald Trump signalled that Washington was no longer interested in pursuing a deal with Iran.
In a post on Truth Social, Trump said, "We don't need a deal with Iran. Those days have long since passed."
Following the remarks, US West Texas Intermediate crude futures climbed more than 1% to trade above $87 a barrel. Brent crude, the international benchmark, also gained more than 1%, moving above $94 a barrel.
Higher crude prices lifted energy stocks, with Chevron and ExxonMobil both gaining around 1%. Healthcare stocks also offered some support, as Eli Lilly shares rose more than 1%.
ALSO READ: Who Is Colette Kress? Meet The Nvidia Insider Taking Over As Interim CEO After Jensen Huang's Exit
The latest market moves come amid growing concerns over the broader economic outlook, including persistent inflation, the possibility of further Federal Reserve rate hikes and elevated long-term interest rates.
CNBC reported that Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, urged investors to remain cautious about the recent market recovery.
He pointed to several emerging risks, including stubborn inflation, the prospect of additional Fed tightening, changing policy dynamics in Washington and regulatory demands linked to artificial intelligence and data centres.The combination of renewed pressure on AI stocks, rising oil prices and uncertainty over interest rates has added to the challenges facing investors as they assess Wall Street's next move.
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