Major US technology stock indices fell sharply at the close of trading on September 3 (local time), with Nvidia shares losing $279 billion. This news triggered a sharp decline in similar stocks across Europe and Asia.
Waiting for interest rate cuts from the Fed.
Nvidia's stock price, the US-based multinational technology corporation, fell 9.5% at the close of trading on September 3 (local time), marking the sharpest one-day drop in market capitalization ever for a US company. This drop in Nvidia's stock price followed a wave of sell-offs in the technology sector as investors expressed doubts about the prospects of artificial intelligence (AI) development and the potential for returns on investments in the field. This development means Nvidia lost $279 billion in market capitalization.
Investor skepticism about the prospect of recouping investments in major technology companies has spread to even Wall Street's most valuable firms in recent weeks. Shares of the iShares Semiconductor Fund fell 7.6%, while shares of Intel, Marvell Technology, and Micron all dropped at least 8%. Large-cap technology stocks declined broadly, with Apple, Meta Platforms, Amazon, Alphabet, and Microsoft (MSFT) all losing value.
US stocks surged in August as investor concerns about the health of the economy eased and expectations rose that the Federal Reserve would soon cut interest rates further. However, this trend reversed in early September, on the first trading day after the US Labor Day holiday (September 2). Fed Chairman Jerome Powell hinted at an interest rate cut, possibly as early as the September meeting, but added that US economic data released on September 6 would influence decisions on the pace and extent of the rate cuts.
European and Asian stocks fell accordingly.
Influenced by the US, European stock markets also fell at the opening of trading on September 4th. The pan-European Stoxx 600 index fell 1.1% in early trading, with all sectors declining. Technology stocks dropped 2.5%, while automotive and banking stocks fell 1.3%. In Asia, according to the Japan Times, Japanese stocks experienced their sharpest decline in a month. The Nikkei 225 blue-chip average fell by 4.7%, the largest drop since the 12% crash on August 5th. The overall Topix index in Japan lost 3.7%. Technology stocks in South Korea, India, Thailand, and Indonesia also declined on September 4th.
According to Tomoichiro Kubota, a senior market analyst at Matsui Securities, the AI-driven stock market rally has ended, and current market developments are raising concerns about an economic recession. Furthermore, worries about higher borrowing costs in Japan resurfaced after Bank of Japan (BOJ) Governor Kazuo Ueda reiterated that the BOJ would continue raising interest rates if the economy and prices perform as expected. Ueda's comments helped the yen maintain its 1% gain against the USD. Some analysts view this stock market decline as a temporary reaction rather than the start of another crisis.
Compiled by KHANH MINH
Source: https://www.sggp.org.vn/co-phieu-cong-nghe-toan-cau-giam-manh-post757238.html
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