Nvidia plunges but tech shares rebound, oil prices slump

Technology shares bounced back on Monday after last week's sharp losses, despite a plunge in Nvidia following a probe into its boss Jensen Huang over claims of an affair with an alleged Chinese spy.

Oil prices slumped on renewed hopes for diplomatic talks aimed at ending the US-Iran war, with the international benchmark contract Brent losing almost six percent.

Chipmakers and other companies linked to the artificial intelligence boom have experienced periodic waves of selling in recent weeks, including Thursday, when worries that Democratic triumphs in US elections would halt or derail AI data centers weighed heavily on stocks.

But Wall Street on Monday rebounded, with the tech-heavy Nasdaq finishing up 2.7 percent.

"You had a sell-off and now things are cheaper," said Adam Sarhan of 50 Park Investments.

"Normally, whenever you see these outsized moves to the downside in a short period of time without any major fundamental change, it's just fear-based, there are good buying opportunities because value investors show up and they buy the dip because the market's undervalued."

The gains were also broad-based, with all 11 sectors in the S&P 500 finishing higher. The biggest increases were in industrials and consumer discretionary, which climbed more than three percent.

But the gains did not extend to Nvidia, which saw its shares lose more than four percent after earlier losing more than twice that amount early in the session.

Briefing.com analyst Patrick O'Hare said Nvidia was being treated as a one-off story by investors for the moment.

"The stock is being penalized for Jensen Huang's personal transgression, which has invited a great deal of uncertainty into the mix, but the market isn't caught up in the notion that this situation is going to have a systemic domino effect," he said.

The news that Nvidia's board would investigate whether Huang had been targeted in a foreign espionage plot, following his admission he was unfaithful to his wife, brought fresh uncertainty in the markets.

The New York Times last month reported that US intelligence officials concluded a Chinese executive linked to a Singapore-based data center company called Megaspeed had been funneling information to Beijing.

The executive, Alice Huang -- also known as Huang Le, and no relation to 63-year-old Taiwanese-born Jensen -- developed a close relationship with the Nvidia boss, the Times said.

In a message to company employees released to media on Sunday, Huang acknowledged having an affair and apologized to his family and company staff.

Nvidia is a global leader in producing chips used to train and run AI models and one of the world's most valuable companies, and last year became the first to reach a market capitalization of $5 trillion.

Technology analyst Dan Ives, at the investment bank Yorkville Ives, said the crisis would at the very least spark congressional inquiries and "create an overhang on the stock for a myriad of reasons".

China on Monday said the claims that it had spied on Huang were "baseless."

Europe's main stock markets rose following gains across much of Asia.

New York - Dow: UP 2.2 percent at 52,389.75 (close)

New York - S&P 500: UP 2.4 percent at 7,549.94 (close)

New York - Nasdaq Composite: UP 2.7 percent at 25,253.14 (close)

London - FTSE 100: UP 1.0 percent at 10,782.87 (close)

Paris - CAC 40: UP 1.2 percent at 8,233.30 (close)

Frankfurt - DAX: UP 1.7 percent at 26,267.19 (close)

Tokyo - Nikkei 225: UP 2.3 percent at 58,775.50 (close)

Seoul - Kospi: DOWN 0.8 percent at 5,018.85 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 24,448.95 (close)

Shanghai - Composite: UP 0.3 percent at 3,660.79 (close)

Brent North Sea crude: DOWN 5.9 percent at $92.57 per barrel

West Texas Intermediate: DOWN 4.4 percent at $86.85 per barrel

Euro/dollar: UP at $1.1221 from $1.1143 on Friday

Pound/dollar: UP at $1.3440 from $1.3352

Dollar/yen: DOWN at 157.48 from 158.48 yen

Euro/pound: UP at 83.50 from 83.45 pence