ASX set for flat start, Nvidia scandal weighs on Wall Street

Detailed summary

US stocks closed lower as a pullback in big AI-focused companies weighed on the market, capping a turbulent week on Wall Street.

US stocks closed lower as a pullback in big AI-focused companies weighed on the market, capping a turbulent week on Wall Street.

The S&P 500 fell 0.4 per cent, but managed to post a 2.5 per cent gain for the week. This marks the benchmark index’s first winning week since October and its biggest weekly gain since August.

The Dow Jones Industrial Average recovered from an early slide and eked out a 0.1 per cent gain. The Nasdaq composite fell 0.9 per cent, but also notched its first weekly gain in five weeks. The Australian sharemarket is set for a flat start to the week, with futures on Saturday pointing to a dip of 2 points at the open. The Australian dollar was weaker at US67.92¢.

The major indexes have been shaky this week as some of the biggest AI companies pushed and pulled the market. Many of those companies have big stock values with a heavier impact on the market’s gains or losses.

The market remained unsteady a day after the AI industry was rocked by the resignation of Nvidia CEO Jensen Huang. The company has been the face of the AI industry, which has been responsible for much of the gains, and big swings, on Wall Street.

Huang stepped down after his affair with a Chinese tech executive raised US national security concerns. Nvidia’s longtime chief financial officer, Colette Kress, will be its interim CEO. The ensuing fallout cost Nvidia’s market cap just under $US600 billion ($883 billion) this week.

The AI industry’s influence over Wall Street was evident again Friday, as the slump in technology stocks with a big focus on AI weighed on the market, even though more than 60 per cent of the stocks within the S&P 500 rose.

Nvidia was again among the heaviest weights and it fell 2 per cent. Broadcom fell 4.8 per cent and Advanced Micro Devices lost 8.8 per cent. Both companies saw their shares surge earlier this week as the management shake-up at Nvidia unfolded.

Nvidia in particular has been slipping for weeks amid wider concerns about a potential slowdown for the…

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