Nvidia(NVDA.US) plummets, dragging down the market; NASDAQ drops over 1%. Market polarization intensifies amid AI boom.

Amid the intense volatility triggered by the artificial intelligence (AI) theme, NVIDIA (NVDA.US) experienced its worst single-day performance since last spring, dropping nearly 5.5% on Thursday, dragging down the overall U.S. stock market.

That day, the S&P 500 index fell 0.5% to 6,908.86 points; the Dow Jones Industrial Average edged up 17.05 points to close at 49,499.20; the Nasdaq Composite plunged nearly 1.2% to 22,878.38. Market data shows that despite the overall weakness, the number of stocks rising in the S&P 500 was more than twice the number falling, indicating clear sectoral divergence.

NVIDIA “Has It All Been Good News?”

According to WisdomTree Finance APP, as the core beneficiary of the AI computing wave, NVIDIA’s latest quarterly earnings again significantly exceeded market expectations, with strong profit growth and a revenue outlook for the current quarter that also surpassed Wall Street estimates. CEO Jensen Huang stated, “Our customers are accelerating their investments in AI computing power, and these ‘factories’ are driving the AI industrial revolution and its future growth.”

However, as “beat expectations” has become the norm, market surprise levels are gradually diminishing. Investors are concerned that, with companies investing billions in AI, it remains uncertain whether they can recoup costs through productivity gains in the future. If customers cut back on high-end chip purchases and related investments, NVIDIA’s high-growth logic could face challenges.

As the largest company by market value in the U.S. stock market, NVIDIA has a very high weight in the S&P 500. Data shows that its single-day decline nearly contributed over 80% of the S&P 500’s drop, making it a key factor dragging down the market.

C3.ai Stock Rebounds, AI Competition Worries Persist

In contrast to NVIDIA, C3.ai (CRM.US) stock rose over 4%. The company’s latest quarterly profit also beat analyst expectations, and it announced a share buyback program returning up to $50 billion to shareholders, along with an increased dividend.

CEO Marc Benioff said, “Agent-based AI is becoming a tailwind for our business.”

However, despite the short-term rebound, C3.ai’s year-to-date decline remains close to 25%. Previously, market concerns centered on emerging AI competitors potentially disrupting its core customer management business.

In fact, since the beginning of this year, stocks across various industries—from trucking logistics to financial services—have faced heavy selling by investors, worried that their business models could be weakened or eliminated by AI disruption. The software sector has been particularly volatile. A widely watched software industry ETF rose 2.1% on Thursday but is still down over 22% for the year.

Oil Prices Fluctuate Sharply, US-Iran Negotiations in Focus

Beyond tech stocks, oil markets are also highly volatile. Indirect negotiations between the U.S. and Iran over nuclear plans have heightened energy market sensitivity. The market generally believes that a breakthrough in talks could ease war risks, prevent global oil supply disruptions, and push prices higher.

U.S. benchmark crude briefly fell to $63.60, then rebounded above $66.50, finally closing at $65.21, up 0.3%. Brent crude settled at $70.75 per barrel, down slightly by 0.1%. Macquarie strategists noted that this round of negotiations is “crucial to success or failure.”

Bond Markets Stabilize, Employment Data Remains Moderate

In the bond market, U.S. Treasury yields edged lower. The 10-year Treasury yield dipped from 4.05% at Wednesday’s close to 4.01%. A recent report showed that initial jobless claims in the U.S. rose slightly last week but remained in line with economists’ expectations and at relatively low levels historically.

In overseas markets, European stocks generally rose modestly. Asian markets were mixed, with South Korea’s KOSPI surging 3.7% to a new record high, with a year-to-date gain approaching 50%; Hong Kong’s Hang Seng Index fell 1.4%.

Analysts note that while the AI revolution presents huge opportunities, the market is also reassessing the sustainable growth of high-valuation tech giants. As corporate earnings realization and valuation expectations clash, U.S. stock market volatility is likely to persist.