GLOBAL MARKETS-Asian stocks tumble, Nvidia stings as board to decide CEO's fate

Global stocks tumbled on Thursday, led by losses in chipmakers and data centre operators as Nvidia shares cratered in after-hours trading on news that its board may oust longtime CEO Jensen Huang. An 8.8% plunge in Nvidia shares in extended trading reverberated across Asian markets, weighing ‌on S&P 500 e-mini futures, down 0.5%, and triggering broad losses in chip stocks.

Taiwan's benchmark index tumbled 2.6% and South Korea's Kospi fell 0.9%, dragging the MSCI Asia-Pacific ex-Japan index down 1.2%. Japan's Nikkei 225 sank 0.9%. "Nvidia sits at the centre of an increasingly interconnected AI ecosystem," said Charu Chanana, chief investment strategist at Saxo Bank in Singapore. "Its turmoil comes when financing, hyperscaler capex, valuations and returns on AI ‌investment were already under scrutiny."

Nvidia's board reportedly met late Wednesday to decide whether to oust Huang, a source familiar with the matter said, as the world's dominant supplier of AI processors ‌grappled with the fallout of allegations that he had an affair with a suspected spy for China. The New York Times has also reported that Huang had had an affair with a company executive who reported to him. "It looks bad from every single angle," said Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma. "I believe the board won't oust him until they have an all-star, a known entity in the tech sector, to replace him," he said. "At ⁠the end ​of the day, let's not forget that the Nvidia ⁠chip is the centrepiece of the AI story."

It's not yet clear who might replace Huang as CEO. In the meantime, Chinese domestic GPU makers surged on Thursday as expectations rose that Nvidia's troubles could help local chip suppliers win ⁠greater market share. Chinese AI firms are reportedly rushing to secure Nvidia chip capacity, fearing that the US could cut them off in the wake of the scandal. Stocks on Wall Street made gains on Wednesday, ​with the S&P 500 rising 1.3% and coming close to retracing all of the losses since last week's US midterm elections, as CoreWeave reassured investors over its path to ⁠profitability by the first half of 2028, lifting semiconductor stocks. The data centre operator gave back some of those gains in after-hours trading, down as much as 3% in Asia on Thursday.

The US dollar index, which measures the greenback's strength against ⁠a ​basket of six currencies, was up 0.1% at 102.98, its highest level since April 9 last year in the aftermath of Trump's Liberation Day tariff announcement. The currency has gained 1.3% over the past three sessions as traders repriced the odds the Federal Reserve will lift interest rates next month. A week ago, traders saw a one-in-three chance that the Fed would hold rates steady ⁠at its upcoming meeting ending on December 9. Now, Fed funds futures are pricing a 90.8% chance of a 25-basis-point hike at that meeting, and ascribe 9.2% odds of a larger ⁠50-basis-point hike, according to the CME Group's FedWatch tool.

The ⁠yield on the US 10-year Treasury bond was up 0.7 basis point at 4.992% on Thursday, as trading resumed after a holiday the previous day. In oil markets, Brent crude was down 1.0% at $91.87 as easing concerns over an escalation of conflict in the Middle East reduced the ‌risk premium in crude markets.

In ‌cryptocurrencies, bitcoin and ether fell 1% to $73,579.07 and $2,047.27 respectively.