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Nvidia plunges amid alleged Chinese spy row but tech shares rebound, oil prices slump
The news that Nvidia's board would investigate whether Huang had been targeted in a foreign espionage plot brought fresh uncertainty in the markets.
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Technology share prices clawed back some of last week's sharp losses on Monday, though gains were tempered by a plunge in Nvidia following a probe into its boss, Jensen Huang, over claims of an affair with an alleged Chinese spy.
Oil prices fell five per cent on hopes for diplomatic talks aimed at ending the US-Iran war.
Chipmakers and other companies linked to the artificial intelligence boom took a hammering in the days after last Tuesday's US midterm elections, which saw Democrats sweep both chambers of Congress, leading to speculation lawmakers would seek to rein in tech firms.
Also read: Nvidia CEO Jensen Huang's China spy probe explained: Background, allegations and key details
But Wall Street's main indices opened higher, with the tech-heavy Nasdaq adding 0.9 %.
Briefing.com analyst Patrick O'Hare said the rebound in equities was due to more than just the drop in oil prices.
"What we also have this morning is an inclination to buy into last week's weakness, and specifically into the large losses seen in the AI trade," he said in a note to clients.
The Philadelphia Semiconductor Index, which includes major chipmakers and AI firms, rose 1.9 per cent.
But the gains did not extend to Nvidia, which saw its shares slump more than eight per cent as trading got underway in New York.
O'Hare said Nvidia was being treated as a one-off story by investors for the moment.
"In other words, the stock is being penalised for Jensen Huang's personal transgression, which has invited a great deal of uncertainty into the mix, but the market isn't caught up in the notion that this situation is going to have a systemic domino effect," he said.
The news that Nvidia's board would investigate whether Huang had been targeted in a foreign espionage plot, following his admission he was unfaithful to his wife, brought fresh uncertainty in the markets.
The New York Times last month reported that US intelligence officials concluded a Chinese executive linked to a Singapore-based data centre company called Megaspeed had been funnelling information to Beijing.
The executive, Alice Huang -- also known as Huang Le, and no relation to 63-year-old Taiwanese-born Jensen -- developed a close relationship with the Nvidia boss, the Times said.
In a message to company employees released to the media on Sunday, Huang acknowledged having an affair and apologised to his family and company staff.
Nvidia is a global leader in producing chips used to train and run AI models and one of the world's most valuable companies, and last year became the first to reach a market capitalisation of $5 trillion.
Also read: Nvidia business partner Megaspeed denies ‘illegal transfer of AI chips’ to China amid espionage row
Technology analyst Dan Ives, at the investment bank Yorkville Ives, said the crisis would at the very least spark congressional inquiries and "create an overhang on the stock for a myriad of reasons".
"This will add risk to the stock as he is so important to the Nvidia story and strategy globally," Ives said.
"This will also increase major scrutiny regarding selling chips to China, which remains a key battleground issue in DC," he added.
China on Monday said the claims that it had spied on Huang were "baseless".
Europe's main stock markets rose in afternoon trading following gains across much of Asia.
The dollar fell against its main rivals.
Also read: Nvidia probe into CEO Jensen Huang’s affair raises troubling questions for AI
Key figures at around 1430 GMT:
New York - Dow: UP 1.1 % at 51,858.65 points
New York - S&P 500: UP 0.8 % at 7,438.80
New York - Nasdaq Composite: UP 0.9 % at 24,792.85
London - FTSE 100: UP 0.7 % at 10,742.85
Paris - CAC 40: UP 1.1 % at 8,225.88
Frankfurt - DAX: UP 1.2 % at 26,134.77
Tokyo - Nikkei 225: UP 2.3 % at 58,775.50 (close)
Seoul - Kospi: DOWN 0.8 % at 5,018.85 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 % at 24,448.95 (close)
Shanghai - Composite: UP 0.3 % at 3,660.79 (close)
Brent North Sea crude: DOWN 5.5 % at $92.90 per barrel
West Texas Intermediate: DOWN 4.9 % at $86.34 per barrel
Euro/dollar: UP at $1.1197 from $1.1138 on Friday
Pound/dollar: UP at $1.3416 from $1.3350
Dollar/yen: DOWN at 157.95 from 158.46 yen
Euro/pound: UP at 83.44 from 83.43 pence
