It took five minutes for Tuesday’s hot inflation report to knock stocks lower, and chip stocks struggled to hold an early rebound. Nvidia (NVDA) hasn’t been sold this hard, this fast since 2019, but the typical S&P 500 stock is barely down.
The S&P 500 (^GSPC) was down nearly 1% midday Tuesday, shedding about $500 billion in market value according to Yahoo Finance calculations, while the PHLX Semiconductor Index (^SOX) fell more than 1%. The equal-weighted S&P 500 (^SPXEW), which gives every company the same weight, was down only about 0.2%.
Nvidia fell about 6%, slicing through the $170 level chart watchers flagged, and is on track for its lowest close since March 30 as the scandal surrounding CEO Jensen Huang drags on. Its relative strength index, a gauge of how fast and how hard a stock has moved, sank to 23 out of a possible 100 — its most oversold reading since June 2019.
Read more: Nvidia stock drops as spy fiasco involving CEO Jensen Huang raises broader risk concerns
Memory makers Micron (MU) and SanDisk (SNDK) and chip designer Arm (ARM) fell roughly 3% to 5%. AMD (AMD) and Broadcom (AVGO) held up after Monday’s surge.
The longer view is starker. A Yahoo Finance basket of 62 chip stocks has lost about $5 trillion in market value since Oct. 6, roughly a quarter of its worth. That’s more than the roughly $3 trillion the entire S&P 500 has shed over the same stretch, even though the basket includes some companies outside the index.
Tuesday’s trigger was a hotter-than-expected October Consumer Price Index. S&P 500 futures fell about 0.5% in the five minutes after the 8:30 a.m. ET release, on volume many times the morning’s norm. Nasdaq-100 futures briefly erased their losses by 10 a.m., then slid again.
Bonds felt it too. The 5-year Treasury yield (^FVX) was on track for its biggest one-day jump since April 2025, and the 10-year (^TNX) climbed back above 5% as traders raised bets on a December rate hike.
BofA’s Savita Subramanian sees the bigger risk in the S&P 500 itself.
“We’re not particularly bullish on the index. I think the index itself is a bit risky,” the head of US equity and quantitative strategy at BofA Securities told Yahoo Finance on Tuesday. “What’s the most crowded equity ticker in the world? It’s the S&P index.”
The typical stock looks nothing like the index. The equal-weighted S&P 500 is up about 4% since Oct. 6 and closed at a record on Nov. 4.
Some see Nvidia’s slide as a chance to buy. “I think if [CEO Jensen Huang] stays, then this is going to prove to be overdone. And you know this will be a strong buying opportunity,” Bernstein’s Stacy Rasgon said Monday on Yahoo Finance’s “Deirdre Bosa Live.”
