Nvidia CEO 'Dismissal Preparation' Report Causes Stock to Drop About 8% After Hours. As an Index Investor, I Break Down Why News About 'People' Moves Stocks

“Why does the stock price fall when the company’s performance hasn’t changed at all?”
“Does news that the CEO might be replaced have anything to do with me, as someone who invests in index funds?”

On November 11 (US time), the US newspaper The Wall Street Journal reported that the board of directors of major US semiconductor company Nvidia is preparing for the dismissal of Chief Executive Officer (CEO) Jensen Huang. Following the report, it was reported that the company’s stock price fell by approximately 8% in after-hours trading (trading that takes place before and after regular trading hours).

It wasn’t that the earnings were bad; rather, news about a ‘person’ caused the stock price of one of the world’s leading major companies to move significantly. I invest in index-type mutual funds through the Tsumitate NISA (installment investment) quota, and when I see news like this, I first wonder, ‘Why do stock prices move because of people?’ I will organize that point step by step here.

※Figures are based on reports as of the evening of November 12, 2026. The dismissal has not been officially decided and is still at the reporting stage. Please check the latest information yourself.

The November 11 report and the November 12 Tokyo market

Still a report of ‘preparation,’ not a ‘decision’

According to the report, Nvidia’s board of directors is discussing Mr. Huang’s treatment and is also proceeding with finding a successor. Issues surrounding Mr. Huang’s own actions are cited as the reason, but I will not go into detail about that in this article.

However, at the time of writing, there has been no report that the dismissal has been officially decided. What is being reported is the stage of ‘preparing to proceed.’

Nikkei Stock Average down 429 yen, but TOPIX rises

In the Tokyo market on the following day, the 12th, it was reported that this news became a burden. The Nikkei Stock Average fell for the first time in four days, closing at 60,819.36 yen, down 429.23 yen.

On the other hand, the Tokyo Stock Price Index (TOPIX) was up 7.94 points at 3,937.33. On the Tokyo Stock Exchange Prime Market, 957 stocks rose and 548 fell, making it a day with more gainers. It is reported that 313.91 yen of the Nikkei Average’s decline was due to the drop in the price of one semiconductor inspection equipment company (Advantest).

Even on the same day, how you perceive it changes significantly depending on which index you look at.

Stock prices move based on views of the ‘future’

Stock prices contain expectations for future profits

Stock prices are not determined solely by current profits. They heavily incorporate expectations of ‘how much profit this company is likely to generate in the future.’

Expectations also include trust in the people leading the company

When thinking about a company’s ‘future,’ investors look not only at products and technology, but also at who is determining the company’s direction. If a manager who has led the company for a long time might be replaced, some people will perceive it as ‘the way forward might change.’

Even if the earnings figures haven’t changed, if the view of the ‘future’ changes, the stock price will move. The approximately 8% drop this time is considered to be a reflection of such a change in perspective in the price.

Moving before a decision is made happens because the market anticipates and prices it in

The reason the stock price moves even though it is still at the ‘preparation’ report stage is because the market anticipates and tries to incorporate what might happen into the price. I wrote about this concept of ‘pricing in’ in a previous article. Depending on follow-up reports, the price may move again.

Holding individual stocks versus holding index funds

When you hold an individual stock, news about the company’s ‘people’ has a direct impact

When you hold stock in a single company, news about its management directly affects your assets. If it moves by about 8% in a single day, as it did this time, the valuation of that stock moves in the same way.

I also hold a small amount of individual stocks, and I consider stocks with shareholder benefits as a ‘fun bucket’ separate from my regular savings.

When you hold index funds, you don’t rely on one person. However, you are still affected by large companies

Index-type investment trusts hold stocks of hundreds or thousands of companies collectively to track an index. Even if there is news about one company’s management, the impact on your total assets is limited to that company’s weight in the index.

However, this does not mean the impact is zero. Many US and global stock indices are structured so that the larger the company’s market capitalization (roughly the company’s size, calculated as stock price multiplied by the number of shares), the larger its weight in the index. If the stock price of a large company moves significantly, the index will also move to some extent.

In the Tokyo market on the 12th, the decline of a single stock accounted for the majority of the Nikkei 225’s drop, while the TOPIX rose; this is an example of how the differences in index structures manifest.

Understanding risk

Even if you hold index funds, there will be days when they go down

When you diversify through index funds, the impact of news about a single company is reduced, but on days when the entire market falls, the index will also fall. Index-type investment trusts also carry the risk of losing your principal.

The report is still in the intermediate stage. No one can predict what happens next

This report is still in the intermediate stage. No one knows if it will be officially decided, who the successor might be, or how the stock price will move from here. Follow-up reports could cause it to move in the opposite direction.

Do not buy or sell based on a single piece of news

If you buy or sell based on a single piece of news, thinking ‘it dropped so I’ll buy’ or ‘it’s scary so I’ll sell,’ you are moving toward market timing. I make it a rule not to change my savings settings based on news.

Take a look at the contents of your investment trust once

Even with index-type investment trusts, the proportion of countries and companies varies depending on the product. The monthly reports issued by asset management companies (monthly performance reports) often list the top holdings, so taking a look at them once can help you stay calm on days when news like this breaks.

Summary: News about people moves individual stocks significantly

• On November 11, it was reported that Nvidia’s board of directors was preparing to dismiss the CEO, and the stock price fell about 8% in after-hours trading. No official decision has been reported.

• The Nikkei 225 fell 429.23 yen on the 12th. On the other hand, the TOPIX rose, and more stocks on the Prime Market gained value.

• Stock prices incorporate expectations for the ‘future,’ and that includes trust in the people leading the company.

• When you hold stock in a single company, news about its people has a direct impact. When you hold an index, the impact is limited to that company’s weight, but the movements of large companies still show up in the index.

• No one can predict what will happen next. I do not change my investment plan based on a single piece of news.

I invest a fixed amount every month using my tax-advantaged investment quota. Even on days when news breaks about the top leadership of a major company, I keep my investment schedule and amounts exactly the same.

When I see news that stirs my emotions, I remind myself, ‘How many years from now will I use this money?’ If it is money I plan to use 10 or 20 years from now, I try to view today’s news as just one of many company events that will occur over time.

Thank you for reading this far. If you found this helpful, a ‘like’ or a follow would be a great encouragement. Please feel free to share your thoughts in the comments, such as ‘what you check when you see company news.’

Note: This article is for informational purposes only and does not constitute investment solicitation or advice. Please make investment decisions at your own risk.