Nvidia Almost Single-Handedly Takes Down the S&P 500
Shares of Nvidia were hammered Monday, accounting for two-thirds of the decline in the S&P 500.
The Magnificent Seven’s dominance in the U.S. stock market is a blessing on the way up, but as Monday’s price action showed, it’s a curse on the way down.
Fueled by worries about China’s new DeepSeek artificial intelligence models and the impact they will have on the chip giant, shares of Nvidia Corp. tumbled 17%.
On Friday, Nvidia had been the world’s most valuable company by market cap and, as a consequence, the largest holding of S&P 500 exchange-traded funds like the Vanguard S&P 500 ETF (VOO), with a 6.8% weighting.
On Monday, the stock’s 17% plunge was responsible for taking more than a full percentage point off the value of the index and the ETFs that track it.
That means on a day that the index was lower by 1.5%, Nvidia accounted for four-fifths of the decline (120 basis points).
In contrast, Nvidia’s impact on the Invesco S&P 500 Equal Weight ETF (RSP) was negligible. The ETF, which holds a 0.2% position in the stock—the same as any other stock in the portfolio—was up fractionally on the session.
On the flip side, for an ETF like the VanEck Semiconductor ETF (SMH), where Nvidia holds a 19% weighting, its massive decline was responsible for 350 basis points of the fund's 10% decline.
The Rest of Mag 7 Was Mixed
Some other Magnificent 7 stocks also made big moves Monday, but nothing compared to the swings in Nvidia.
Microsoft Corp. was lower by 2.1%; Tesla Inc. dropped 2.3%; Alphabet Inc. shed 4.2%; Amazon.com Inc. was up 0.3%; and Apple Inc. and Meta Platform Inc. were up 1.9% and 3.2%, respectively.
Broadcom Inc., another chip giant but not among the Mag 7, dropped even more than Nvidia, by 18%.
With a 2.2% weighting in the S&P 500, its decline slashed around 40 basis points off the index. In other words, if it weren’t for Nvidia and Broadcom, the S&P 500 would have finished the day nearly unchanged.
