Since last Friday (June 5), the broader US stock market started sliding as investors worried that rate cuts might not happen this year, pulling the entire AI sector down with it. On Tuesday (June 9), the panic reached NVIDIA, pushing shares below the key $200 mark to an intraday low of $199.34. Fortunately, deep buyers rushed in to lift the stock back up by the closing bell, pulling off a classic V-shaped recovery. Is this scary dip the start of a bigger market crash, or just a healthy pause before the next run?
Breaching $200 on Tuesday Before a Fierce V-Reversal
This recent drop across tech stocks actually kicked off last Friday (June 5). The broad market took a hit, dragging NVIDIA down by over 6% in a single day to finish around $205. After catching its breath on Monday, Tuesday (June 9) brought an even harsher, market-wide wave of selling.
With panic selling accelerating, NVIDIA (NVDA) headed straight down after the opening bell, hitting an intraday low of $199.34 and breaking under $200—the most critical psychological floor for investors right now. Compared to its mid-May high of $236, the stock shed nearly 16% in just a few days, wiping out over a month of gains.
Thankfully, the time spent below $200 didn't last. The cheap prices looked too good to pass up, and a wave of institutional and retail buyers jumped in during afternoon trading. Backed by a big jump in trading volume, they forcefully dragged the price back up to close at $208.19. While the daily bounce-back saved the bulls from a technical breakdown, it showed just how intense the battle is at $200.
Why the US Indices and AI Stocks Are Dropping Together
NVIDIA's technical breakdown wasn't its own fault. Since late last week, the entire US market and the AI supply chain have been getting dragged down together for three main reasons:
Major Indices Slid Over Macro Anxieties: Last Friday's strong jobs report made investors worry that the Fed will keep interest rates higher for longer, causing Treasury yields to bounce around. Plus, with everyone nervous about the critical CPI inflation data coming out Wednesday (today), the Nasdaq slid over 5% from its peak. When the broader market bleeds, giant stocks like NVIDIA take the blame.
The AI Sector's Rollercoaster Shakeout: After a wild year-long rally, the AI trade is finally cooling down. Investors are suddenly looking at the math, asking, "When is all this heavy spending on AI going to actually pay off?" On Tuesday, the whole AI sector experienced violent swings. Memory giant Micron swung wildly and plunged 10% intraday, Marvell dropped 7.6%,and AMD shed 3%.
Profit-Taking From Crowded Funds: The reality is that anyone who bought AI stocks over the last few months made a ton of money. Seeing the broad market wobble, big fund managers decided to play it safe and lock in profits. Everyone trying to exit at the same time caused a technical stampede.
Where Are the Macro Indices and AI Stocks Headed Next?
Looking ahead, the days of "blindly buying any AI stock and making easy money" are over. The market is heading into a brutal split:
- Nasdaq & S&P 500: Today's CPI Data Rules the Trend
The index drop over the last few days is a normal pause after hitting record highs. The CPI and inflation data coming out Wednesday and Thursday will be the big decider. If inflation is sticky and shows no signs of slowing down, the Fed won't cut rates, and the Nasdaq will likely slide further to find a real bottom.
- AI Sector Trend: No More Easy Rallies; The Elimination Rounds Begin
This industry-wide sell-off is a healthy flush out of market froth. Moving forward, AI stocks will separate based on real numbers:
Speculative & Hype-Only AI Plays: Companies that only talk about AI but don't have actual big orders or profits to show for it are going to have a rough time, likely sliding into a slow, long-term decline.
Core Hardware & Infrastructure Play (Like NVIDIA): Its position as the undisputed king hasn't changed. Apple's newly announced AI strategy relies directly on NVIDIA GPUs inside Google Cloud for its advanced cloud models. With Blackwell chips completely sold out for quarters to come, its real business foundations separate it completely from speculative bubbles.
- Key Technical Targets for NVIDIA
Tuesday's V-shaped bounce offers a breather, but the fight over $200 isn't settled. If the CPI numbers miss and the broad market stays weak, NVIDIA will likely retest its recent lows. The absolute strongest floor below sits around the $185 – $190 range (the open chart gap left behind back in April).
Conclusion and advice
NVIDIA's dip and quick recovery on Tuesday was a textbook high-volume shakeout heavily tied to broad market weakness.
If you are a long-term investor looking out a year or more, the business itself is fine. Broad market pullbacks like this are usually a "golden opportunity" to pick up great stocks at a discount in small batches. But if you are a short-term trader or using high leverage, don't rush to buy with everything you've got before the market stabilizes. Protecting your cash and watching out for a potential double-bottom drop is the smartest move right now.