Wall Street just had its best week since August, and chip stocks led the way. But by Friday the rally was cracking, and the bond market had turned against the AI trade.
The PHLX Semiconductor Index (^SOX) still finished the week up about 8%, with the Nasdaq 100 (^NDX) up about 3.5% and the S&P 500 (^GSPC) up about 2.5%. Most of those gains came early. From Wednesday’s close through Friday, a Yahoo Finance basket of 62 chip stocks lost more than $650 billion in market value, and only three rose.
Nvidia (NVDA) never joined the rally. The stock fell about 13% in the week Jensen Huang resigned as CEO, its worst week since April 2025 and its sixth straight weekly loss, the longest streak since 2012. That wiped out about $570 billion in value as investors weighed Nvidia’s $530 billion web of AI deals.
The damage spread to Nvidia’s partners. Nebius (NBIS), in which Nvidia holds a stake, fell about 10% for the week after disappointing third quarter earnings. Nvidia-backed CoreWeave (CRWV) slid about 6% Friday, though it still finished up about 15% after strong quarterly results. Memory makers Micron (MU) and SK Hynix (SKHY), leaders of the early-week bounce, gave back roughly 3% to 4% Friday.
The charts show where the rebound ran out of steam. The chip index stalled before it got back to its 200-day moving average, a long-term trend line. The Nasdaq-100 closed back below its own similar average, and the Nasdaq Composite (^IXIC) closed right at it.
Bonds stopped breaking chips’ fall
During the AI sell-off, Treasurys acted as a shock absorber. The 10-year yield (^TNX) fell on all six of chip stocks’ down days from Oct. 22 to Nov. 6, as investors bought bonds when chips sank.
But this past week, yields rose on all three days when semis were down. The 10-year jumped about 30 basis points to about 5.15%, and the 5-year climbed about 33 basis points. For both, it was the biggest weekly rise since April 2025.
The Fed is the 800-pound gorilla
On Tuesday, Fed Governor Christopher Waller opened the door to a half-point rate hike, and hours later the October Consumer Price Index came in hot. On Friday, wholesale prices rose at their fastest annual pace in nearly four years.
Over the sell-off, every chip crash made traders doubt a hike was coming. Polymarket’s odds of a Dec. 9 rate increase fell to about 66% after the Nov. 5 rout. By Friday, they were about 98%, with the odds of a half-point move up to 10%. Futures now price in about two quarter-point hikes by March 2027, up from one right after the crash.
