NVDA hedging sparked tech selloff
Key Points
- Options pricing had implied roughly a 7% one-day move for NVDA, prompting elevated hedging that weighed on Nvidia and AI/semiconductor peers.
- Investors had trimmed exposure to AI and tech ahead of Nvidia's earnings, contributing to equity weakness across US, European, and Asian markets.
- Macro data risks, including RBA minutes, Japan's trade figures and US import/export price releases, had kept positioning cautious and favored defensive flows.
- Energy had led sector performance while consumer discretionary and tech ETFs had been among the weakest as investors shifted toward lower-beta assets.
Global Market Summary
U.S. equity benchmarks closed lower: the Dow (DJIA) fell 0.73%, the S&P 500 (SPX) dropped 0.40% and the Nasdaq (^IXIC) declined 0.67% as investors trimmed exposure to AI and tech ahead of Nvidia's earnings. European bourses were weaker with the CAC 40 (FRA40) down 1.86%, the FTSE 100 (UKX) off 1.27% and the DAX (DAX) down 1.74%, reflecting the same risk‐off tone. Asian markets lagged, led by the Nikkei (NKY) which slid 3.22%, the Hang Seng (HSI) down 1.72% and 000001.SS losing 0.81%.
Top Movers
Energy led among sector ETFs as XLE rose 0.97%, while consumer discretionary XLY (-1.35%) and tech ETF VGT (-0.99%) were among the weakest. Small and niche gainers included ONDS (25.19%) and DGNX (21.49%), while notable decliners included MENS (-12.19%) and NICE (-12.03%).
Macro highlights
High‐importance calendar items included repeated releases of RBA meeting minutes and Japan's October balance of trade (previous −¥234.6B, forecast −¥150.0B), while U.S. Import and Export Price Indexes and the Census M3 manufacturers report were scheduled for the day; these data risks kept positioning cautious. Trimmed implied odds of a near‐term Fed rate cut also left yields and the dollar sensitive and contributed to defensive flows into lower‐beta assets.
News that moved markets
Options pricing implied roughly a 7% one‐day move for NVDA ahead of its quarterly results, prompting elevated hedging that weighed on Nvidia and AI/semiconductor peers. Home Depot's Q3 EPS miss and reduced full‐year profit outlook pressured retail and housing‐sensitive stocks, and bitcoin (BTC-USD) briefly dipping below $90,000 amplified risk‐off flows and contributed to index weakness. Multiple completed transactions closed on the day: Mondevo Group completed its acquisition of Meight and rebranded as MonTech, ZenaTech closed the Rampart Surveys acquisition to expand Drone‐as‐a‐Service in Colorado, Tiger Infrastructure Partners completed a growth investment in ELM Utility Services, and CytoMed Therapeutics completed the acquisition of T Cell Technology. Announced deals included Simon's acquisition of Phillips Place and SAFE's acquisition of Balbix.
What to Watch Tomorrow
- GB Inflation Rate YoY (OCT) — consensus 3.6% vs 3.8% prior, Nov 19, 07:00 AM | Signals current inflation trend influencing household costs and price pressures.
- US FOMC Minutes — Nov 19, 07:00 PM | Provides insight into policy discussions and assessment of growth and inflation.
Key Takeaways
- Global equity indices had finished lower as investors trimmed AI/tech exposure and NVDA hedging had pressured semiconductors and tech stocks.
- Asian bourses had lagged, led by a notable decline in the Nikkei, as risk-off flows from tech weakness and hedging extended across the region.
- Energy ETFs had outperformed while consumer discretionary and tech ETFs had lagged, reflecting defensive rotation into lower-beta assets amid cautious positioning.
- M&A and investment deals had closed or been announced during the day, while Home Depot's EPS miss and bitcoin's brief drop had intensified defensive positioning.
References
- 1. https://www.reuters.com/business/nvidia-set-320-billion-price-swing-after-earnings-options-indicate-2025-11-18/
- 2. https://www.reuters.com/business/us-stock-futures-slip-rate-cut-hopes-fade-valuation-worries-persist-2025-11-18/
- 3. https://www.nasdaq.com/articles/pre-market-earnings-report-november-18-2025-hd-pdd-mdt-bidu-eslt-bz-jhx-brbr-enr-wb-ocsl
- 4. https://www.bloomberg.com/news/articles/2025-11-16/asia-set-for-sluggish-open-ahead-of-delayed-data-markets-wrap
- 5. https://www.bls.gov/schedule/2025/11_sched_list.htm
- 6. https://www.census.gov/economic-indicators/calendar-listview-2025.html
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