Nasdaq Falls 2.6% as Fear Spikes; SpaceX-Tesla Deal Needs Musk

The Nasdaq had its worst session since June as sentiment slid into extreme fear, and the SpaceX and Tesla merger talks gained a new wrinkle on governance. Nvidia also kept announcing partnerships and investments.

Key points

• Nasdaq fell 2.6% in its worst session since June, and a sentiment gauge moved to “Extreme Fear,” according to Benzinga.
• Japan’s Nikkei 225 fell more than 1% as the US tech selloff hit semiconductor and AI-linked stocks.
• SpaceX said a potential merger with Tesla needs Musk’s approval, though he has recused himself from the talks.
• Hong Kong Exchanges and Clearing (HKEX) added a 40-stock AI index and a 30-stock semiconductor benchmark.
• Nvidia invested in AI video startup Higgsfield and joined a Kazakhstan robotaxi pilot plan.

How bad was the tech selloff?

Benzinga reported that the Nasdaq dropped 2.6%, with Meta, AMD, Nvidia and Tesla among the decliners, while the Dow edged higher. That split matters. The damage was concentrated in growth and AI-heavy names rather than spread across the whole market.

The weakness carried into Asia. The Economic Times said the Nikkei 225 dropped over 1%, with concerns about valuations and spending weighing on Japanese equities. Some consumer and food stocks advanced. The sources do not give a single cause for the drop beyond those valuation and spending worries, so treat any firmer explanation as unconfirmed.

Sentiment readings are a snapshot, not a forecast. Extreme fear readings can persist or reverse quickly.

What does the SpaceX and Tesla merger need?

SpaceX said on Thursday that a potential merger with Tesla will require approval from controlling investor Elon Musk, even though he has recused himself from talks between the two companies because of conflicts of interest, per Manila Times.

EconoTimes reported that independent director committees are reviewing a possible deal. Musk said they have not agreed on terms and that any transaction would need shareholder approval.

So the picture is early. Committees are reviewing, no terms are agreed, and both a Musk sign-off and a shareholder vote would be needed. Investors should not read talks as a done deal.

On the stock side, GuruFocus said Wedbush analyst Dan Ives prefers SpaceX (SPCX) over Netflix after this week’s earnings, noting SpaceX surged after reporting stronger-than-expected results. That is one analyst’s view, and the summary available to us is truncated.

What is Nvidia doing beyond the selloff?

Nvidia was active on several fronts, even as its shares fell.

• Higgsfield: Bloomberg reported, via Investing.com, that Nvidia invested in the AI video startup. The available summary gives no deal size or terms.
• Robotaxis: ride-hailing platform inDrive signed a memorandum of understanding with Pony.ai and Nvidia to trial robotaxis in Kazakhstan. Testing starts in Astana in the first half of 2027 with a safety operator on board, and driverless service is planned later.
• Europe: CEO Jensen Huang says Europe’s engineering strength could let it lead in physical AI, spanning robotics and related fields.
• Devices: ASUS launched ProArt P16 and P14 laptops in the Philippines built on Nvidia’s RTX Spark platform, which pairs a Blackwell RTX GPU with a Grace CPU.

These are small, early or promotional items. None changes near-term earnings on its own, but they show how widely Nvidia is placing its bets.

Why does the HKEX index launch matter?

FinanceFeeds reported that HKEX added a 40-stock AI index and a 30-stock semiconductor benchmark. Both are real-time and rebalanced quarterly. China Southern licenses the AI index for a mainland ETF.

Benchmarks like these give investors a rules-based way to hold Hong Kong-listed AI and chip names, and an ETF tied to the AI index is a concrete product. Whether it draws meaningful assets is not yet known.

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