Nvidia Shares Drop Amid Global Market Downturn

Nvidia’s shares dropped by 9.5% amid global market concerns and US recession fears, wiping $279 billion from its market value.

Nvidia, the American semiconductor giant, has seen its shares plummet nearly 10% as global markets, especially in Asia and the US, face economic challenges.

This decline stems from concerns about a potential recession in the United States, sparking anxiety across global financial markets.

On September 4, 2024, Nvidia’s stock dropped by 9.5%, wiping out $279 billion (£212.9 billion) in market value. This sharp decline followed an announcement that the US government had issued subpoenas to Nvidia and other technology companies as part of an investigation into artificial intelligence (AI) practices.

Investor unease, worsened by sluggish manufacturing data in the US, led to a swift market response.

Major US technology companies, including Alphabet, Apple, and Microsoft, also experienced sharp declines, dragging the Nasdaq index down by over 3% and the S&P 500 by more than 2%. Nvidia’s stock slump was a significant driver of these losses.

The downturn extended to Asian markets, where Japan’s Nikkei 225 fell by 4.4%, and South Korea’s Kospi and Hong Kong’s Hang Seng Index dropped by 3% and 1.3%, respectively. Technology firms across Asia, including Taiwan’s TSMC and South Korea’s SK Hynix, mirrored Nvidia’s losses, reflecting widespread investor concerns.

With the US non-farm payrolls report expected soon, investors are closely watching for signs of the Federal Reserve’s next moves on interest rates. Growing scepticism about rate cuts has added to the downward trend in global stock prices.

Swetha Ramachandran, a fund manager at Artemis Investment Management, suggested Nvidia’s steep decline might also be tied to the US Department of Justice’s antitrust investigation. This, combined with Nvidia’s forecasted slowdown in growth, has realigned investor expectations.

Oil prices have also been affected by the economic slowdown, with Brent crude falling to $73.14 per barrel and US crude reaching $69.72, the lowest levels since December. This decline reflects reduced demand expectations amid global recession fears, particularly in China, the world’s largest oil importer.