S&P 500 Dips as Nvidia-Led Tech Stumble Weighs on Market
New York, NY – August 30, 2025, The S&P 500 closed lower on Friday, August 29, 2025, falling 0.8% to 6,444.606, driven by a sharp decline in technology stocks led by Nvidia Corporation (NASDAQ: NVDA), as detailed in the finance card above. The tech-heavy Nasdaq Composite dropped 1.2%, while the Dow Jones Industrial Average saw a milder decline of 0.3%. The market’s downturn followed Nvidia’s highly anticipated earnings report, which, despite strong headline numbers, disappointed investors due to a shortfall in data center revenue and ongoing uncertainties in its China business.
Nvidia, a key driver of the AI-fueled market rally, reported second-quarter revenue of $46.7 billion, up 56% year-over-year, and net income of $26.4 billion, a 59% increase, according to a Reuters report. However, its data center segment, critical to its AI dominance, fell short of Wall Street’s $1.51 billion expectation, landing at $1.49 billion. The company also forecasted third-quarter revenue of $54 billion, slightly above the consensus estimate of $53.1 billion, but its inability to ship H20 chips to China due to tightening U.S. restrictions rattled investors. Nvidia’s stock slid over 3% in after-hours trading, contributing to a broader tech sector sell-off that shaved approximately $12 billion off its market value.
The S&P 500’s decline was exacerbated by other tech-related disappointments, including Marvell Technology (NASDAQ: MRVL), which plummeted 16% after reporting weaker-than-expected data center revenue and issuing a third-quarter forecast of $2.06 billion, below analysts’ $2.11 billion target. The ripple effect hit other semiconductor stocks, with the VanEck Semiconductor ETF dropping 4%. Posts on X reflected investor frustration, with some users noting Nvidia’s outsized 8.2% weight in the S&P 500, amplifying its impact on the broader index.
Despite the daily loss, the S&P 500 remains on track for a 1.9% gain in August, having crossed 6,500 for the first time earlier in the week, as reported by Yahoo Finance. The index’s year-to-date rise of 14.5% reflects resilience, though its forward price-to-earnings ratio of 22, the highest in four years, signals stretched valuations, particularly in tech. DataTrek Research highlighted that just four stocks—Nvidia, Microsoft, Meta, and Broadcom—account for 60% of the S&P 500’s 2025 gains, underscoring the market’s top-heavy reliance on AI-driven names.
Macroeconomic factors also played a role, with the core Personal Consumption Expenditures (PCE) index rising 0.3% monthly and 2.9% annually in July, slightly above the Federal Reserve’s 2% target. This data, combined with a stronger-than-expected GDP growth revision to 3.3% for Q2, tempered expectations for aggressive rate cuts, contributing to market unease. The 10-year Treasury yield, which climbed to 4.28% earlier in the week, eased to 4.20%, but rising yields continue to pressure growth stocks like Nvidia.
Analysts remain divided on the tech sector’s outlook. While some, like Wedbush, see Nvidia’s results as a “beat and raise” that reinforces AI demand, others caution that high expectations and crowded positioning could lead to further volatility. The S&P 500’s ability to hold above its 50-day moving average of 6,300 suggests technical support, but investors are bracing for potential turbulence as the Federal Reserve’s September meeting looms.
Sources: Reuters, Yahoo Finance, Investing.com, DataTrek Research, X posts