"Sell the news" Nvidia plunges… Nasdaq down more than 1% [New York market briefing]

Nvidia plunges despite strong earnings

Long-pressed software sector rebounds

The three major U.S. stock indexes finished the session mixed after a bout of sharp volatility.

Nvidia, a key pillar of the artificial intelligence (AI) industry, posted strong results for last year’s fourth quarter, but the market used them as a trigger to sell—true to the Wall Street adage: “buy the rumor, sell the news.”

With Nvidia tumbling 5.46%, AI and semiconductor stocks that had lifted global equities since the start of the year were swept into the selloff as well.

On the 26th (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed up 17.05 points (0.03%) at 49,499.2. The S&P 500 fell 37.27 points (0.54%) to 6,908.86, while the Nasdaq Composite dropped 273.69 points (1.18%) to finish at 22,878.38.

Nvidia’s results for fiscal 2026 (November 2025 to January 2026) were robust. Revenue and earnings per share (EPS) both topped market expectations, and key metrics including gross margin set new highs.

Even so, investors dumped Nvidia shares shortly after the open.

Rather than disappointment with the numbers, the selling appears to have been driven by a view that the results were already priced in—and doubts about whether the company can deliver something even stronger from here.

Tom Graff, chief investment officer (CIO) at Facet, said, “Nvidia is facing two-sided conditions: lofty expectations embedded in the stock price and a skeptical market,” adding, “Given that, the next few quarters are likely to be anything but smooth.”

The Philadelphia Semiconductor Index also fell more than 3% on the day, at one point extending losses to as much as 4.79% intraday.

After rising more than 6% through the previous session this year, fatigue and resistance near the highs likely added to downside pressure.

Alongside Nvidia, TSMC, Broadcom, Micron Technology, AMD and Intel fell around 3%.

By contrast, the software sector, which had lagged, rallied. IGV, a representative exchange-traded fund (ETF) for the group, rose 2.16%.

As software rebounded, sectors that had been touted as potential casualties of “AI disruption” also recovered. Fears that AI could replace them had hit financial services, real estate brokerage analytics, and even logistics companies particularly hard.

Visa and Mastercard gained more than 1%, and JPMorgan rose 0.93%. Goldman Sachs and Morgan Stanley also climbed around 1%, while Charles Schwab jumped 2.28%.

Min-kyung Shin, Hankyung.com reporter radio@hankyung.com