Nvidia shares fall nearly 10%, sending the stock market down

The big story was in Nvidia shares, which cratered an almost 10% loss so hard it shook Asia and the States alike. The global economy went into a tailspin and there was mass panic among investors around technology trends. Nvidia was dropping as fears of a recession in the world’s biggest economy remained elevated.

Chart Of The Day: Nvidia Sinks, Big Market Mover

Nvidia shares fell 9.5% on Wednesday, wiping a staggering $279 billion (£212.9bn) off its market value. For Nvidia, a leading AI and chip play, there was a lot of excitement based on all the advances in artificial intelligence. But the stock went into a slump when concerns about a slowing economy in the big, bad US drowned out all that AI hype.

Impact on the US Stock Market

The decline was not limited to Nvidia. The biggest US stock index also suffered big losses. The S&P 500 fell more than 2%, with the Nasdaq — loaded with tech stocks that have benefited from far-fetched trends during the lockdown — falling more horribly, down more than 3%. Other tech giants suffered similarly heavy losses, with Alphabet (Google’s parent company), Apple and Microsoft all seeing their stocks fall.

It was a wake-up call for investors as tech stocks are seen as leading indicators of economic trends. Julia Lee, managing director at FTSE Russell, said: “Market movements have been dominated by growth concerns. Many others were quick to point out that this is easier said than done, especially given the economic environment is so volatile. With not being as favorable as it used to be.

Asia Joins US to Decline as Market Losses Pile Up (Update2)

The market’s decline extended beyond US borders. A dramatic drop in New York sent the biggest Asian markets lower on Wednesday morning.

Sentiment among investors looked particularly grim in Japan, where the Nikkei 225 index dropped a surprising 4 points.

South Korea’s Kospi sank 3 percent and Hong Kong’s Hang Seng sank 1.2 percent.

Asian technology companies have been hit hard. Most of them depend on exports. Shares of companies such as TSMC, Samsung Electronics, SK Hynix, and Tokyo Electron fell on Monday amid concerns that a possible global slowdown would affect their business models.

Exporters Hit by Global Growth Concerns

Exporting countries are seeing investors become more cautious, but the slowdown in the U.S. appears to have traders worried about falling demand for Asian exports. “Exporting countries in the region are feeling the brunt of the pain, as concerns around global growth are also rising,” Mr Lee said. By this logic, any signs of a recession in the US could spill over into global markets, with Asia most at risk.

Otherwise, Investors Turn their Attention to US Jobs and the Fed

As the broader economy moves toward refocusing, this Friday’s U.S. nonfarm payrolls report is now in sharp focus…the numbers will provide an important picture for investors and policymakers. How the US labor market, which has been in the spotlight. For both groups during this year.

The report is particularly important because it could help determine whether the Federal Reserve raises interest rates next. The decision will be closely watched by investors as they look for clues as to whether the U.S. central bank is preparing to halt course or cut rates in response to potential economic headwinds. Market analysts agreed that the decision could reverberate through both the U.S. and global economies.

Who Is Going to Cut Rates?

The Federal Reserve has said it will base its decision on future interest rates on both inflation and employment data. A weaker-than-expected jobs report on Friday could prompt the Fed to cut interest rates and bring relief to markets. On the other hand, it rises too high and signals a rate hike or hold on claims, causing market turmoil.

Conclusion: The Misguided Road Of Volatility Ahead

A sharp decline in Nvidia also pushed global markets lower, adding to fears of a slowing US economy. Uncertainty is rising as investors await highly anticipated data and the Fed’s decision.

In the immediate future, much of the focus is on an online or worse US jobs report and the Federal Reserve’s interest rate decision this Wednesday, but these events could also trigger a huge moment of reckoning for global markets. For the moment, caution will still be the name of the game for investors across markets.