It took five minutes for Tuesday’s inflation report to send stocks lower, and chip stocks struggled to maintain an early rebound. Nvidia (NVDA) hasn’t sold off this hard, this quickly since 2019, but the typical S&P 500 stock is barely down.
The S&P 500 (^GSPC) was down nearly 1% as of midday Tuesday, losing 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 index (^SPXEW), which gives every company the same weight, was down only about 0.2%.
Nvidia fell about 6%, breaking through the $170 level reported by chart watchers, and is on track to hit its lowest close since March 30 as the scandal surrounding CEO Jensen Huang drags on. Its relative strength index, which measures how quickly and strongly a stock has moved, fell to 23 out of a possible 100 – its most oversold reading since June 2019.
Learn more: Nvidia stock falls as spying fiasco involving CEO Jensen Huang raises broader risk concerns
Memory makers Micron (MU) and SanDisk (SNDK) and chip designer Arm (ARM) fell about 3% to 5%. AMD (AMD) and Broadcom (AVGO) held up after Monday’s rally.
The long-term vision is darker. A Yahoo Finance basket of 62 chip stocks has lost about $5 trillion in market value since Oct. 6, or about a quarter of its value. That’s more than the roughly $3 trillion the entire S&P 500 lost over the same period, even though the basket includes some companies not in the index.
The trigger for Tuesday was a higher-than-expected October consumer price index. S&P 500 futures fell about 0.5% in the five minutes following the 8:30 a.m. ET release, on volume several times the morning norm. Nasdaq-100 futures briefly erased losses around 10 a.m., then slipped again.
Bonds felt it too. The 5-year Treasury yield (^FVX) was on track for its biggest one-day rise since April 2025, and the 10-year yield (^TNX) rose above 5% as traders increased their bets on a rate hike in December.
BofA’s Savita Subramanian sees the biggest risk in the S&P 500 itself.
“We’re not particularly bullish on the index. I think the index itself is a little bit risky,” the head of U.S. equity and quantitative strategy at BofA Securities told Yahoo Finance on Tuesday. “What is the busiest stock ticker in the world? It’s the S&P index.”
The typical stock looks nothing like the index. The equal-weighted S&P 500 index is up about 4% since October 6 and closed at a record high on November 4.
Some see Nvidia’s slide as a buying opportunity. “I think if (CEO Jensen Huang) stays, then it’s going to prove to be overkill. And you know it’s going to be a strong buying opportunity,” Bernstein’s Stacy Rasgon said Monday on Yahoo Finance’s “Deirdre Bosa Live.”
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