The first victim of this tension was the microprocessor industry. Nvidia, the superstar of the sector, collapsed by 9.53% and On Tuesday alone, the company lost $280 billion in market capitalization, more than the total value of Toyota, Hermès or Pepsico.
“There is an impression that companies have published good results, but not enough for what was expected,” “I think it’s mostly about profit-taking and rebalancing investment portfolios,” Burns said. “I don’t see today’s session as a harbinger of a more significant correction.”
The truth is that US stocks posted widespread declinesat the start of one of the worst months in market history, before data is released that is likely to influence the extent to which the Federal Reserve will cut interest rates.
Market sentiment dipped after data from the Institute for Supply Management on Tuesday showed that U.S. manufacturing remained subdued, despite a modest improvement in August from an eight-month low in July.
September is widely regarded as one of the worst months for stock market performance based on data dating back to the 1950s, said Jason Browne, president of Alexis Investment Partners in Montgomery, Texas.
“We had a weak ISM report this morning, but we think seasonality is an important factor here, especially when we’ve had such strong performance over the year through the end of last month,” said Browne. “Everyone is reporting that September is a horrible month and that tends to feed back into itself.”
The Magnificent Seven collapsed
The stocks that have led this year’s rally suffered widespread declines on Tuesday: Nvidia fell 9.5%; Alphabet fell 3.9%; Apple fell 2.7%; Microsoft fell 1.9%; Meta fell 1.8%; Tesla fell 1.6%; and Amazon fell 1.3%.
According to preliminary data, the S&P 500 lost 118.64 points, or 2.1%, to 5,529.76; the Nasdaq Composite dropped 576.06 points, or 3.3%, to 17,137.56; and the Dow Jones Industrial Average fell 618.72 points, or 1.5%, to 40,944.36.
Traders are awaiting several labor market reports ahead of nonfarm payrolls data for August on Friday. The Fed meeting in mid-month will be closely watched following Chairman Jerome Powell’s recent support for monetary policy easing. The odds of a 25-basis-point interest rate cut are at 63%, according to CME Group’s FedWatch tool, while those of a 50-basis-point reduction are at 37%.
Tesla fell after Reuters reported that the electric vehicle maker plans to produce a six-seat variant of its Model Y car in China starting in late 2025.
Source: Ambito
