Weekly Investment Update (11/13/2026)

Volatility persisted this week as markets navigated a combination of company-specific risk and macroeconomic uncertainty. Nvidia announced the resignation of longtime Chief Executive Officer Jensen Huang following news of misconduct involving his personal and business relationships, introducing new uncertainty around one of the most influential companies in the AI ecosystem. That uncertainty has extended to the broader technology sector. However, with the equal-weight S&P 500 roughly flat on the week, pressure is primarily concentrated in the technology sector. 

At the same time, the October CPI report came in stronger than expected and showed broader inflationary pressure, causing a repricing for additional interest rate hikes into next year as economic growth remains strong and the labor market holds steady, with initial jobless claims still near cycle lows. That said, recent declines in oil prices are likely to offer relief for headline inflation going forward. This week’s economic developments drove Treasury yields higher, with the 10-year yield now back above 5%. 

The week introduced idiosyncratic risk in the technology sector and renewed inflation concerns, yet broader economic activity remains resilient. Technology sector volatility may persist in the near term given risks associated with Nvidia, but the underlying demand for AI infrastructure and computing capacity remains intact. More broadly, corporate fundamentals remain healthy and the growth backdrop remains constructive despite the near-term uncertainty. 

Leadership Change Prompts More Cautious Near-Term Investment View

What is happening: On Thursday, November 12, Nvidia’s board announced that its co-founder  had resigned as president, CEO, and director, effective immediately. His departure ends a 33-year tenure as the company’s only CEO. Chief Financial Officer Colette Kress, who has held that role since 2013, will serve as interim CEO while remaining CFO. The board has opened a search for a new permanent CEO and will consider both internal and external candidates. 

The resignation, which came three days after Huang first admitted to an extramarital relationship and one day after a second was reported, is likely related to those revelations. On Sunday, November 8, Huang admitted to a relationship with Alice Huang (no relation), an executive at Singaporean data center company Megaspeed. The New York Times reported that U.S. officials believe Alice is working on behalf of Chinese intelligence, although Beijing has denied the spying allegations. Megaspeed purchased approximately $4.8 billion worth of Nvidia chips over the past two years, and the U.S. Justice Department suspects some of them may have been smuggled to China. A Bloomberg investigation estimated that more than half of the purchases were Blackwell architecture chips, which are subject to U.S. export controls that restrict sales to China. Additionally, on Wednesday, November 11, The New York Times reported that Huang had been in another separate relationship with Kimberly Powell, Nvidia’s vice president of healthcare and his direct report. Aside from the resignation, the Justice Department will continue to investigate the Megaspeed situation. Nvidia stock is down over 20% since the midterm elections amid the recent scandals and the broader AI selloff following the midterm elections. In comparison, the S&P 500 index has been more or less flat over that same time period.

Why it matters: Huang’s departure realizes a key-person risk and changes our assessment of Nvidia. Huang’s importance to Nvidia is hard to overstate. He has led the company for more than three decades, championed the vision that graphics chips would be central to AI computing, and become the public face of American AI chip leadership. The second extramarital relationship also raises governance and internal-control questions that the board’s review may not resolve quickly. In response, our investment team has adopted a more cautious near-term view of Nvidia.

At the same time, it’s important to emphasize that this recommendation is for a reduction in exposure rather than a complete exit, and does not represent a broader retreat from AI-related investing. The company’s competitive advantages do not disappear with one executive. Those advantages include its leading GPUs, its CUDA software suite, and a more secure hardware supply chain than many competitors’. Also, demand from cloud providers is expected to remain strong and is driven by their own spending plans rather than by who runs Nvidia. The Megaspeed allegations should also be viewed in context. Routing restricted chips to China through Singapore, Malaysia, and other U.S.-friendly hubs is a long-running enforcement problem and not a new revelation. Experts estimate that hundreds of thousands of restricted chips have been smuggled into China over the past few years. In light of this week’s developments, we consider additional export restrictions highly likely. These could include tighter licensing, chip tracking requirements, or blacklisting of intermediaries. However, Nvidia is already barred from selling its high-end chips to China, so the impact of new government restrictions on future revenues is likely to be limited. 

What’s clear is that the range of potential outcomes for Nvidia has widened, and leadership uncertainty can weigh on valuations even when fundamentals remain strong. While the stock has already sold off substantially, we are taking a more cautious approach in the near term by trimming Nvidia where appropriate. Where reductions are implemented, we expect to redeploy proceeds selectively across the broader AI ecosystem, subject to account circumstances and available opportunities. We will continue to reassess our positioning over the coming weeks and months.

Another Positive Inflation Surprise

What is happening: The CPI report beat expectations for the third straight month. The headline index rose 0.4% month-over-month in October, with the core (excluding food and energy) index up 0.3%, leaving headline inflation running higher at 3.9% year-over-year and core inflation at 2.8% from 2.6%. 

Both food and energy prices lifted headline prices, with the latter higher on gasoline prices. Price pressures remained fairly broad-based, reflecting strong increases across both goods and services categories. Goods prices were firm despite passthrough from tariffs being largely complete. Price increases in IT goods continued. Within services, medical services were firm despite a decline in health insurance prices, and travel services such as hotels and airfares remained strong. Housing prices remained relatively modest though firmer than in recent months.

Separately, several Federal Reserve (Fed) officials, including Fed Governor Waller, gave hawkish speeches that pointed to further rate increases in the coming months. 

Why it matters: Not only did the inflation report surprise expectations, but measures of breadth showed a broadening in price pressures. Following the release, fixed income markets repriced Fed rate hike expectations, now anticipating three to four additional 25-basis-point increases by the end of next year, compared with roughly two previously.

A December rate hike is now fully priced. Sticky inflation against a backdrop of solid domestic demand sets a low bar for additional rate hikes. Amid elevated energy prices, concern is also growing over passthrough from crude oil and diesel prices into consumer prices.

One positive development in the past week has been a significant drop in oil prices, which is likely to help lower inflation in November. Gasoline prices are down 7% so far this month. Should oil prices remain at current levels or fall further, headline inflation could ease in the coming months, although that would not by itself establish a durable decline in underlying inflation. Underlying inflation trends such as unit labor costs, wage growth and housing costs also remain subdued. 

Nonetheless, progress on core inflation is likely to remain slow as price pressures can be persistent against a solid growth backdrop. The AI capex cycle is also likely to keep pockets of inflation elevated in the short run. That should keep the Fed biased toward additional rate hikes. Our base case is a rate hike in December followed by another in the first quarter. Beyond that, rate hikes are more of an open question. Outside of economic data, financial conditions are also a parameter that the Fed is closely watching. With financial conditions already showing some, albeit modest, signs of tightening since the first hike, we believe the Fed is likely to proceed cautiously. But there is a growing risk that the Fed’s rate-hiking cycle will last longer than previously expected.