Nasdaq-100 futures slid 0.8% on Wednesday evening as Nvidia shares dropped about 8% in after-hours trading following reports regarding Jensen Huang.
Nvidia shares hit futures tied to the tech-heavy Nasdaq-100 index hard. S&P 500 futures fell 0.4% and Dow Jones Industrial Average futures remained little changed, according to CNBC’s market reporting.
The sharp move followed a report from the Wall Street Journal.
The board was preparing to oust Huang.
That report followed revelations of an extramarital relationship with an executive at the company who reported to him, the Journal reported.
The New York Times reported earlier on Wednesday that Huang had an extramarital relationship with an executive at the company who reported to him.
Huang acknowledged in a memo to employees on Sunday that he had been unfaithful to his wife, though he did not publicly identify people or provide details.
The sudden leadership trouble introduces acute key-man risk for a company that anchors retirement portfolios and major indexes.
Nvidia accounted for roughly 6.3% of the S&P 500 at the end of October.
Nvidia’s large weight in stock indexes means its shares can affect people who own index funds through retirement accounts.
During Wednesday’s regular trading session, Nvidia shares had risen 2.9%.
Selling resumed in extended U.S. trading as the reports surfaced.
The drop dragged down major Nvidia customers and suppliers.
CoreWeave and Nebius Group led the steepest after-hours declines on the Nasdaq-100. Both companies rent out computing capacity powered by Nvidia chips to firms building and running artificial intelligence models.
Conversely, shares of Advanced Micro Devices and Broadcom rose about 4% and 3% respectively after hours, cushioning the index as other chip stocks fell.
Market sentiment remains caught between enthusiasm for artificial intelligence and macroeconomic pressures, including inflation and interest rates.
Callie Cox, director of investment strategy at Plancorp, described the competing market forces.
“Lately, the stock market has been locked in a fierce battle between the hope of AI and the fear around interest rates and inflation,” Cox said.
“There doesn’t seem to be much in between, and something may have to give,” she added.
Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, urged caution regarding market rebounds given changing conditions.
“We would be a little circumspect about the bounce-back as there are some things changing at the margin [like] stubborn inflation, more fed rate hikes, higher long-term interest rates, change in configuration in Washington DC [and] AI/data center regulation demands,” Samana said.
Markets await initial jobless claims data and existing home sales figures for further economic direction.
Earlier coverage: Nasdaq Sinks Over 5% as Investors Sell Chip & Data Stocks
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