Nvidia Corp. shares tumbled 4.3% after CEO Jensen Huang disclosed a personal affair and the board launched an investigation. Despite this, the S&P 500 surged 2.3%, marking its largest one-day gain since April. This divergence is historic — only three times since 2001 has Nvidia fallen 4%+ while the index rose 2%+.
The last such occurrence was in May 2009, when Nvidia’s market cap was just $5 billion, compared to its current $4.3 trillion. Historically, when Nvidia drops 4%+, the S&P 500 averages a 1.6% decline. Recent examples include a 9.3% Nvidia drop on Nov. 5 correlating with a 4.4% index fall, and a 6%+ drop on June 5 leading to a 2.6% slide.
The correlation has deepened as Nvidia became a dominant force in the index.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing