Stocks slumped on Friday, led by the chip makers caught in the swirl of Nvidia’s leadership turmoil, at the end of another volatile five-days for the market that, nonetheless, remained on course for its best week in months.
The S&P 500 rose 2.5 percent for the week, notching its best weekly performance since early August. That would come despite a 0.4 percent decline on Friday, capping a week that swung from gains to losses and back multiple times.
The Nasdaq Composite rose roughly 2.3 percent for the week, even after a fall on Friday.
The moves mark an end to weeks of losses in which concerns about a slowdown in the growth of the artificial intelligence industry weighed on the market and prompted sharp sell-offs in many of the tech companies that have led the market higher in recent years.
Friday’s sell-off, however, underscored earlier analyst warnings of the likelihood of more volatility to come, even if many still expect the market to rally through the end of the year.
“The market is in an incredibly good position to move higher,” said Mark Hackett, chief market strategist for the investment management arm at Nationwide, an insurance company. “Once you get through the news-driven sentiment, you can get back to focusing on fundamentals. That is hopefully what we are seeing.”
The market was on edge after revelations that Jensen Huang, the Nvidia chief executive and a standard-bearer for the A.I. revolution, had engaged in an extramarital affair with a woman believed to be a Chinese spy.
After reports that Mr. Huang had a second affair, this time with a subordinate employee, Nvidia’s board announced his departure Thursday morning, a dramatic fall from grace for the tech mogul. Nvidia’s shares dropped on Thursday, and, after a brief rally Friday morning, quickly gave way to a 2 percent drop.
Nvidia’s stock is now about 30 percent below its all-time high, set just over a month ago. The company, which is the second-largest member of the S&P 500 index, behind Apple, is trading about 12 percent lower for the year.
Importantly, analysts said, Nvidia’s big drop has not spread to the rest of the market. Despite falling alongside Nvidia on Friday, rival chip makers’ stocks have mostly risen this week, as have A.I. stocks more broadly.
Advanced Micro Devices, a competitor to Nvidia, fell more than 8 percent on Friday but remained roughly 19 percent higher for the week. Sandisk fell 5 percent on Friday but remained roughly 6 percent higher for the week.
“We doubt the fundamentals supporting the A.I. industrial revolution are altered by Jensen Huang’s departure from Nvidia,” analysts at Raymond James, a financial services company, said, adding that “‘hate selling’ is understandable, but objectively, fundamentals appear to have changed very little.”
Analysts who cover Nvidia have been adjusting their expectations this week, based on forecasts compiled by Bloomberg. While many analysts have cut their share price targets sharply, they still expect the stock to trade markedly higher than where it currently trades, at around $163.
Harlan Sur at JPMorgan lowered his price target for the company to $215 from $320 over the summer. Atif Malik at Citi lowered his to $225 from $315 this month. Karl Ackerman at BNP Paribas has kept his target at $345.
Stock investors have also brushed off a sharp rise in interest rates this week, driven higher by data showing U.S. consumer prices rising more quickly than expected, followed by further data showing persistent wholesale inflation.
The 10-year Treasury yield, which underpins interest rates for mortgages, business loans and other types of debt throughout the economy, rose nearly 0.3 percentage points this week, to 5.15 percent, its biggest move higher since April 2025.
Investors now expect the Federal Reserve to raise interest rates at least 0.75 percentage points over the next 12 months, starting with a quarter-point raise in December. A week ago, investors were forecasting just one quarter-point increase over the same period.
The two-year Treasury yield, which is sensitive to changes in expectations for Fed rate moves, has risen more than 0.3 percentage points higher this week, its largest one-week rise in more than four years.
Beth Hammack, president of the Federal Reserve Bank of Cleveland, said on Thursday that the central bank needed “to move to a restrictive stance of policy to help bring inflation back down,” meaning a need to raise interest rates further.
“If we don’t,” she added, “I worry that an inflationary mind-set could start taking hold.”
