The S&P 500 is shrugging off Nvidia's selloff this week. Here's what's keeping the rest of the market afloat.

By Isabel Wang

Is Wall Street finally outgrowing Nvidia?

If Nvidia's problems have done anything good for the stock market, it's that investors have been forced to look up from the poster child of the artificial-intelligence trade and remember the other stocks on the board.

That's why the S&P 500 SPX has managed to hold up, gaining nearly 3% this week to date - even as Nvidia's shares (NVDA) have plunged over 10% after an investigation was launched into CEO Jensen Huang. Huang resigned as the company's CEO on Thursday following reports of two extramarital affairs, one with an alleged Chinese intelligence asset and another with an Nvidia executive.

At the sector level, the S&P 500's industrials XX:SP500.20, energy XX:SP500.10 and consumer-discretionary XX:SP500.25 areas have been among the week's strongest performers in the large-cap benchmark index, according to FactSet data.

Notably, Nvidia's steep decline hasn't been enough to drag the broader tech sector lower. Instead, it has given other chip makers and hyperscalers room to breathe, with the S&P 500's information-technology sector XX:SP500.45 still up 3.7% so far this week, according to FactSet data.

"Index investors have more exposure to this leadership drama than many realize," said Mark Malek, CIO at Siebert Financial. "When a single company represents more than 6% of the S&P 500, its succession risk becomes a portfolio risk for millions of investors who never deliberately bought the stock."

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Yet with a current market capitalization of around $3.9 trillion, Nvidia was on track for it lowest weighting in the S&P 500 since May 2025, according to FactSet data. In other words, despite remaining the world's third-largest company by market value, Nvidia could have a diminishing influence on the S&P 500 and investor portfolios if the selloff continues.

This comes as Wall Street has spent more than three years worried about leaning too heavily on one stock. Nvidia has been that elephant in the room - so big that nothing else in the stock market could move without bumping into it. Now, with the broader stock market climbing despite the shock surrounding the leader of the AI trade, investors appear to be increasing their bets beyond a single story.

That's also why a stock like Advanced Micro Devices (AMD), one of Nvidia's biggest rivals, has popped over 30% this week. The PHLX Semiconductor Index SOX, which tracks major chip makers, is up more than 11% over the same period, according to FactSet data.

"One person's slip-up may be another's fortune, and with competitors nipping at Nvidia like AMD, Alphabet (GOOGL) (GOOG), Broadcom (AVGO) - expect those companies to grab share as Nvidia tries to sort things out," said Bob Lang, founder and chief strategist at Explosive Options.

In addition, Lang told MarketWatch that Nvidia's recent decline may not have much of an impact on the broader AI trade, which is still likely to get a boost from Anthropic's IPO next week.

"The demand remains strong for chips," he said.

James McCann, senior economist of investment strategy at Edward Jones, noted that investors should avoid "overconcentration risks" among technology companies, and instead look to hold "a well-diversified exposure" across large and midcap U.S. stocks, he said in emailed commentary Thursday.

U.S. stocks finished lower on Thursday but still gave back most of their earlier losses in afternoon trading. The Nasdaq Composite COMP fell 0.4%, while the S&P 500 was off just 0.3% and the Dow Jones Industrial Average DJIA lost 0.4%, according to FactSet data.

-Isabel Wang

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11-12-26 1608ET