Global Markets Recover as Nvidia Investigation Tests Investor Confidence

World stock markets edged higher on Monday, recovering modestly from six-month lows, but investor sentiment remained fragile as a decline in Nvidia shares added to concerns surrounding the artificial intelligence sector following last week's global technology selloff, Dhara Ranasinghe and Jiaxing Li reported for Reuters.

Global markets staged a modest recovery after last week's technology selloff, while Nvidia shares came under pressure following the company's investigation into CEO Jensen Huang. [Photo: NVIDIA]

Nvidia shares fell more than 4% in premarket trading after the company announced an independent investigation into whether Chief Executive Jensen Huang had been targeted by a foreign intelligence operation.

The investigation followed reports about Huang's relationship with a Chinese businesswoman suspected by US officials of working for Beijing.

As European trading began, Nasdaq futures were little changed after trading lower earlier.

European stocks initially posted modest gains, while Asian markets recovered, led by Japan's Nikkei, which rose more than 2%.

The decline in oil prices also offered some relief to investors.

Global stocks have faced pressure in recent weeks as concerns about the sustainability of AI-related investments, elevated interest rates and the potential for tighter technology regulation weighed on sentiment.

Democratic victories in the US midterm elections have added to investor concerns that a Democratic-led Congress could intensify scrutiny of AI companies and data-center development.

Analysts cautioned that the recovery could prove temporary, with Nvidia's latest troubles presenting another test for technology investors.

“For now, the repercussions across the wider chip industry look relatively limited although the scandal could disrupt the tech rebound,” said Susannah Streeter, chief investment strategist at Wealth Club.