Dow Jones jumps 1,100 points for best day since April despite Nvidia - Here are factors that contributed to the move

Benchmark indices on Wall Street staged a sharp rebound on Monday, November 9, despite concerns surrounding Nvidia, the world's most valuable company.

The Dow Jones surged over 1,100 points overnight, to mark its best day since April this year, recovering more than 50% of what it lost across Thursday and Friday. The 30-stock benchmark had declined 1,800 points last Thursday and followed it up with another 250 points fall on Friday.

The S&P 500 gained over 2.3% overnight, while the Nasdaq Composite surged 2.7%. All of these moves were seen despite a 4.5% drop in shares of Nvidia, which is a key constituent, after allegations of Jensen Huang being involved with a Chinese spy surfaced. While Huang has admitted to the affair, he reportedly told US President Donald Trump that he had no idea of the woman being a Chinese spy, an allegation that China has gone on to deny as well.

While Nvidia's shares fell, most of Nvidia's peers saw significant buying interest from lower levels. Shares of AMD jumped 13%, while those of Intel, Broadcom, Micron, Sandisk and Western Digital gained between 6% to 10% each.

Here are the contributors to Monday's upmove on Wall Street:

First, the rally in tech shares beyond Nvidia supported the market, almost appearing to create an Anti-Nvidia trade, with buyers piling into its fellow chipmakers, while selling Nvidia alongside.

Second, the dip seen last week appeared as a buying opportunity as many analysts had also recommended after the sell-off as economic fundamentals remained sound and earnings remained robust for most parts of the economy. Analysts at JPMorgan also wrote that the sharp deterioration in momentum seen last week may have pushed investor pessimism close to peak levels.

Third, US President Donald Trump struck a more conciliatory tone on his efforts to end the war in Iran, saying that it is "highly unlikely" that he will order more strikes on Iran. That resulted in oil prices dropping further, with Brent Crude now on the verge of breaking below the $90 a barrel mark.

UBS also wrote in its note that the recent tech sell-off represented a reset and not the start of a structural downtrend in the AI investment cycle. However, they did warn that the rebound does not remove the risk created by concentrated positioning and elevated expectations.

The most important trigger of today's trading session will be the Consumer Price Inflation (CPI) report for the month of October, which will be reported at 7 PM Indian Standard Time this evening. Any positive news on inflation easing could result in further boost to sentiments and delay hopes of the US Federal Reserve raising interest rates as well in December.