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Tech-Led Selloff Deepens After Nvidia Rout as OpenAI Mega-Funding Weighs on Sentiment

Skepticism over AI investment payoffs is driving a rotation out of pricey tech.

Overview

  • Following a 5.5% one-day drop in Nvidia that erased more than $200 billion in value, the Nasdaq fell 1.18% Thursday and U.S. stocks opened lower Friday, with the Dow down about 1.2%, the S&P 500 off 0.9% and the Nasdaq down 1.2% after a hotter producer-price reading.
  • OpenAI announced a $110 billion funding round featuring Amazon ($50 billion), Nvidia ($30 billion) and SoftBank ($30 billion), and major tech shares eased further early Friday.
  • The Magnificent Seven have lost about $1.01 trillion in market capitalization so far in 2026, and the Roundhill Magnificent Seven ETF is down roughly 5.6% year to date.
  • Software stocks continue to slide, with the SPDR S&P Software & Services ETF down about 20% in 2026 and nearly 30% from its autumn peak, while the industry makes up roughly 13% of speculative-grade bank loans.
  • Risk-off moves are spilling into emerging markets, with Argentine bonds and equities falling and the country’s risk premium rising back above roughly 550–560 basis points.