Global Markets Tumble as Nvidia Sell-Off and Weak US Data Spark Concerns

Asian Markets Plunge With Wall St After Nvidia Rout, Weak US Data

Tech firms led a plunge across Asian markets Wednesday after a rout on Wall Street fuelled by a collapse in chip titan Nvidia and disappointing data on US factory activity that revived recession fears. The sight of investors running to the hills sparked memories of the brief but tumultuous sell-off at the start of August that was partly fuelled by a big miss on US jobs creation. All three leading indexes in New York ended sharply lower Tuesday, with the Nasdaq the main casualty -- diving more than three percent -- as traders dumped big-name tech firms including Apple, Alphabet and Amazon. But the biggest loser was AI chip leader Nvidia, which tanked 9.5 percent -- shedding almost $280 billion of its value -- on fears that the surge in firms linked to artificial intelligence may have run too far. That came amid a warning that spending on all things AI by companies in recent years would need to be justified unless demand outside of the tech realm picked up and that it could take some time to begin paying off. Adding to the pain, it emerged after US markets closed that US authorities had issued Nvidia and other firms subpoenas as it probes claims they violated antitrust laws. The selling filtered through to Asia, where tech and chip firms took the brunt of it. Japan's Advantest plunged 8.2 percent and Tokyo Electron more than seven percent, while Sony lost 2.3 percent. TSMC shed more than four percent in Taipei, with SK hynix dumped 6.5 percent in Seoul and Samsung more than two percent off. That led Asian markets deep into the red. Tokyo and Taipei each dived more than three percent, while Seoul was more than two percent lower. Hong Kong, Sydney, Singapore and Manila gave back more than one percent. Shanghai and Wellington were also down. Worries about the US economy burst back onto the scene after figures showed a marginal improvement in factory activity in August but it still remained in contraction for a fifth successive month. The figures come days before a closely watched report on non-farm payrolls, which could have a big impact on Federal Reserve officials' decision-making going into next week's policy meeting. The bank is expected to cut interest rates but the debate surrounds how big it will go, with most tipping a 25-basis-point reduction but a below-forecast reading seen boosting the chances of a 50-point move. While weaker readings on jobs and the economy have in the recent past been seen as positive owing to the chances of the Fed cutting rates, analysts warned that the bad news was now being taken as a worrying sign for the economy. "A 50-basis-point cut might not be the market's best friend if it shows up alongside signs of labour market weakness," said independent analyst Stephen Innes. "In that scenario, those cuts could be viewed less as a soft landing cushion and more as a last-ditch effort to steer clear of a full-blown economic crash." The chances of a bigger Fed rate cut pushed the dollar down against the yen, which had already been given a boost Tuesday by comments from Bank of Japan boss Kazuo Ueda, who said it could hike rates again if the country's economy and inflation perform as expected. Oil extended losses after the previous day's heavy selling sparked by demand worries linked to a weak Chinese economy and questions over the US outlook, while OPEC's consideration of output hikes added to the pain. West Texas Intermediate: DOWN 0.6 percent at $69.89 per barrel

Asian markets plunge with Wall St after Nvidia rout, weak US data

Hong Kong (AFP) - Tech firms led a plunge across Asian markets Wednesday after a rout on Wall Street fuelled by a collapse in chip titan Nvidia and disappointing data on US factory activity that revived recession fears. The sight of investors running to the hills sparked memories of the brief but tumultuous sell-off at the start of August that was partly fuelled by a big miss on US jobs creation. All three leading indexes in New York ended sharply lower Tuesday, with the Nasdaq the main casualty -- diving more than three percent -- as traders dumped big-name tech firms including Apple, Alphabet and Amazon. But the biggest loser was AI chip leader Nvidia, which tanked 9.5 percent -- shedding almost $280 billion of its value -- on fears that the surge in firms linked to artificial intelligence may have run too far. That came amid a warning that spending on all things AI by companies in recent years would need to be justified unless demand outside of the tech realm picked up and that it could take some time to begin paying off. Adding to the pain, it emerged after US markets closed that US authorities had issued Nvidia and other firms subpoenas as it probes claims they violated antitrust laws. The selling filtered through to Asia, where tech and chip firms took the brunt of it. Japan's Advantest plunged 8.2 percent and Tokyo Electron more than seven percent, while Sony lost 2.3 percent. TSMC shed more than four percent in Taipei, with SK hynix dumped 6.5 percent in Seoul and Samsung more than two percent off. That led Asian markets deep into the red. Tokyo and Taipei each dived more than three percent, while Seoul was more than two percent lower. Hong Kong, Sydney, Singapore and Manila gave back more than one percent. Shanghai and Wellington were also down. Worries about the US economy burst back onto the scene after figures showed a marginal improvement in factory activity in August but it still remained in contraction for a fifth successive month. The figures come days before a closely watched report on non-farm payrolls, which could have a big impact on Federal Reserve officials' decision-making going into next week's policy meeting. The bank is expected to cut interest rates but the debate surrounds how big it will go, with most tipping a 25-basis-point reduction but a below-forecast reading seen boosting the chances of a 50-point move. While weaker readings on jobs and the economy have in the recent past been seen as positive owing to the chances of the Fed cutting rates, analysts warned that the bad news was now being taken as a worrying sign for the economy. "A 50-basis-point cut might not be the market's best friend if it shows up alongside signs of labour market weakness," said independent analyst Stephen Innes. "In that scenario, those cuts could be viewed less as a soft landing cushion and more as a last-ditch effort to steer clear of a full-blown economic crash." The chances of a bigger Fed rate cut pushed the dollar down against the yen, which had already been given a boost Tuesday by comments from Bank of Japan boss Kazuo Ueda, who said it could hike rates again if the country's economy and inflation perform as expected. Oil extended losses after the previous day's heavy selling sparked by demand worries linked to a weak Chinese economy and questions over the US outlook, while OPEC's consideration of output hikes added to the pain. West Texas Intermediate: DOWN 0.6 percent at $69.89 per barrel

Global stocks sell-off hits Europe and Asia after sharp drop in Nvidia shares

European and Asian stock markets slid on Wednesday as investors worried about a potential US economic slowdown and sold highly valued technology stocks following a sharp drop in chipmaker Nvidia's share price. The benchmark Stoxx Europe 600 index fell 1 per cent in early trading while the FTSE 100 lost 0.8 per cent. The falls came after US markets on Tuesday suffered their worst day since the sharp market sell-off at the start of August, driven by weak data on the state of the manufacturing sector. Technology stocks led European declines, with Dutch chipmaking equipment group ASML falling 5.1 per cent. The jitters hit Asian markets, with the region's tech and semiconductor supply chain companies suffering particularly acute losses. While the immediate trigger for the market turbulence was fear of recession following the weak US data, the declines also highlight investor unease over the high expectations set for technology earnings, particularly from investments in artificial intelligence. Japan's Topix finished down 3.7 per cent, with chipmaker Tokyo Electron falling 8.6 per cent. The Kospi 200 in Korea closed down 3.4 per cent while Taiwanese chip giant TSMC lost 5.4 per cent. Hong Kong's Hang Seng index was down 1.1 per cent. "The major reason [for the fall in Asian markets] is and was the data from the US," said Tomochika Kitaoka, chief equity strategist at Nomura. "The market has a cloudy view of tech stocks globally . . . we are seeing a natural correction process," he said. The yen also strengthened 0.2 per cent to 145.14 against the dollar following a more hawkish tone from the Bank of Japan on interest rates. US futures pointed to another soft start on Wall Street after Nvidia, the US chipmaking giant shed 9.5 per cent, or more than $250bn, on Tuesday. Contracts tracking the S&P 500 and Nasdaq 100 were down 0.3 per cent and 0.5 per cent respectively. Investors are looking ahead to a range of US jobs data releases this week, including the Jolts job openings data later on Wednesday and, in particular, closely watched payrolls data on Friday. Mohit Kumar, an analyst at Jefferies, said the market was unlikely to suffer the same sized moves as early August as investors had reduced their bets on risky assets. "However, it does mean that the market will be jittery into the payroll data this week," he said. "We are keeping our modest bullish bias on risky assets despite yesterday's moves, but we are keeping the size of our positions small." Nvidia lost a further 0.7 per cent in after-hours trading following a Bloomberg report that the US Department of Justice had sent the company a subpoena, deepening its antitrust probe. A person familiar with the matter confirmed the subpoena, which comes as the DoJ assesses whether Nvidia is using its power as the primary supplier of AI data centre chips to disadvantage rivals. In a statement, Nvidia said it "wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them". The DoJ declined to comment. Crude oil prices also fell to their lowest point of the year, following falls on Tuesday, over concerns that weak Chinese demand would lead to a surplus on the market. Brent futures, the international benchmark, were down 0.6 per cent at $73.34 while West Texas Intermediate, the US benchmark, shed 0.7 per cent at $69.86. Investors also sold off other risky assets. Bitcoin dropped 2.9 per cent to below $55,000 in Asia, its lowest point in a month. Gold, often seen as a haven asset, fell 0.7 per cent.

Nvidia sell-off, growth worries pummel global markets

STORY: Shares across the world took a hit Wednesday (September 4) - battered by factors including a huge sell-off for AI chip champion Nvidia a day earlier. It shed $279 billion in market value over one day - a record for any U.S. firm. That after its outlook for the months ahead failed to excite investors. Tech stocks dragged Asian shares lower as a result. Japan's Advantest, a big supplier to Nvidia, shed almost 8%. Taiwan chip giant TSMC fell over 5%. That saw benchmark indexes suffer, with Tokyo's Nikkei closing down more than 4%. The losses then rolled on into the European trading day. There the regional Stoxx index was down around 1% by mid-morning. Chip-gear firm ASML was among the big losers, down 5%. Economic data added to the gloom, including weak U.S. manufacturing numbers and new figures pointing to a sluggish outlook for China. Those worries hit luxury firms, which depend heavily on China, with LVMH and Gucci-parent Kering both sharply down in early trades. The demand worries also saw oil extend the big slide posted Tuesday, when it fell over 4%. Benchmark crude prices are now close to lows seen in December.

Nvidia sell-off, growth concerns hit markets

Shares fell globally on Wednesday, hit by a drop in tech stocks sparked by a record sell-off for U.S. chipmaker Nvidia and as expectations of fading global growth bruised riskier assets, pushing oil prices to multi-month lows and buoying bonds. European shares shed 1%, with major markets in London, Paris and Frankfurt down between 0.6% and 0.9%. Semiconductor companies were the biggest losers, with ASML Holdings dropping 5.4%. The pain was set to continue on Wall Street, where stock futures extended declines. S&P 500 and Nasdaq futures were down 0.4% and 0.5% respectively. Wall Street closed sharply lower on Tuesday, with artificial intelligence darling Nvidia sinking by a record $279 billion as investors checked their enthusiasm for AI-related stock. "One of the big risks is that you have this market concentration, and all it takes is those names to be volatile, for it to feed through to the entire market," said Justin Onuekwusi, chief investment officer at investment firm St. James's Place. The MSCI world equity index, which tracks shares in 47 countries, fell 0.5%. September has historically been a bad month for stocks, though analysts pointed to a confluence of factors behind the rout, including weak U.S. manufacturing data. Investors noted spiking volatility as liquidity sloshes back into markets following the summer. Brent crude futures fell 0.6% to $73.34 a barrel, trimming some earlier losses, while U.S. crude was last down 0.6% at $69.96, both near their lowest levels since December. They fell nearly 5% on Tuesday. Concerns over the sluggish outlook in China - the world's biggest oil importer - and the possibility of a global slowdown that would mean reduced fuel demand have exacerbated the decline in oil prices. Euro zone government bonds held gains. German Bund yields, a benchmark, had posted their largest one-day fall in a month on Tuesday. Earlier, stock benchmarks in Tokyo and Taipei led the slump in Asia, each falling more than 4%. MSCI's broadest index of Asia-Pacific shares outside Japan finished 1.9% lower. Asian tech stocks suffered. Japanese chip-testing equipment maker Advantest, a supplier to Nvidia, lost 7.7%, while Taiwan's TSMC shed more than 5%. "(There) was plenty of blame to go around. Nvidia. Tech. Soft spots in U.S. data. China gloom," said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank. A beneficiary of the fall in stocks, the safe-haven Japanese yen strengthened by as much as 0.4% to 144.89 per dollar . It last traded about 0.4% higher at 144.90. The dollar was flat, supported by bids for safety. DATA DUE Compounding lower appetite for risk was the prospect of U.S. economic data due this week, which includes figures on job openings, jobless claims and the closely watched non-farm payrolls report on Friday. Given the Federal Reserve's labour market focus, Friday's release could determine whether a rate cut expected this month will be regular or super-sized. "We reckon U.S. growth fears are overplayed and expect a strong payrolls report on Friday," said Alex Loo, FX and macro strategist at TD Securities. Economists polled by Reuters expect the U.S. economy to have added 160,000 jobs in August, a rebound from July's 114,000 increase. Ahead of the releases, moves in currencies and U.S. Treasuries were less marked than those seen in equities. The benchmark 10-year U.S. Treasury yield fell nearly two basis points to 3.82%, while the two-year yield fell to 3.84%. (Reporting by Tom Wilson in London; additional reporting by Dhara Rhanasinghe in London, Rae Wee in Singapore and Tom Westbrook in Sydney; Editing by Sam Holmes, Barbara Lewis and Mark Potter)

Nvidia sell-off, growth concerns hit markets

The German share price index DAX graph is pictured at the stock exchange in Frankfurt. European shares shed 1%, with major markets in London, Paris and Frankfurt down between 0.6% and 0.9%. -- Reuters Shares fell globally on Wednesday, hit by a drop in tech stocks sparked by a record sell-off for U.S. chipmaker Nvidia and as expectations of fading global growth bruised riskier assets, pushing oil prices to multi-month lows and buoying bonds. European shares shed 1%, with major markets in London, Paris and Frankfurt down between 0.6% and 0.9%. Semiconductor companies were the biggest losers, with ASML Holdings dropping 5.4%. The pain was set to continue on Wall Street, where stock futures extended declines. S&P 500 and Nasdaq futures were down 0.4% and 0.5% respectively. Wall Street closed sharply lower on Tuesday, with artificial intelligence darling Nvidia sinking by a record $279 billion as investors checked their enthusiasm for AI-related stock. "One of the big risks is that you have this market concentration, and all it takes is those names to be volatile, for it to feed through to the entire market," said Justin Onuekwusi, chief investment officer at investment firm St. James's Place. The MSCI world equity index, which tracks shares in 47 countries, fell 0.5%. September has historically been a bad month for stocks, though analysts pointed to a confluence of factors behind the rout, including weak U.S. manufacturing data. Investors noted spiking volatility as liquidity sloshes back into markets following the summer. Brent crude futures fell 0.6% to $73.34 a barrel, trimming some earlier losses, while U.S. crude was last down 0.6% at $69.96, both near their lowest levels since December. They fell nearly 5% on Tuesday. Concerns over the sluggish outlook in China - the world's biggest oil importer - and the possibility of a global slowdown that would mean reduced fuel demand have exacerbated the decline in oil prices. Euro zone government bonds held gains. German Bund yields, a benchmark, had posted their largest one-day fall in a month on Tuesday. Earlier, stock benchmarks in Tokyo and Taipei led the slump in Asia, each falling more than 4%. MSCI's broadest index of Asia-Pacific shares outside Japan finished 1.9% lower. Asian tech stocks suffered. Japanese chip-testing equipment maker Advantest, a supplier to Nvidia, lost 7.7%, while Taiwan's TSMC shed more than 5%. "(There) was plenty of blame to go around. Nvidia. Tech. Soft spots in U.S. data. China gloom," said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank. The benchmark 10-year U.S. Treasury yield fell nearly two basis points to 3.82%, while the two-year yield fell to 3.84%.

Nvidia-led slump hits global stock markets

Stock markets globally are feeling the pain of a US-led value slump that was led by a rethink over the recent dominance of artificial intelligence (AI) growth. The darling of US stocks since 2019, AI chipmaker Nvidia, saw its stock plunge almost 10% on the back of poorly received earnings growth last week. Other tech stocks in the AI space were also hit, with market analysts suggesting that a profit taking bandwagon gathered pace due to strong performances for prices over the year to date. Money latest: 80s chocolate bar with iconic song could return The Nasdaq - dominated by tech firms - lost more than 3%. That was its biggest decline since the market wobble of early August caused by jitters over a possible US recession. Further tepid data on the US economy was cited as another reason for broader Wall Street market falls on Tuesday while Brent crude oil costs dropped almost 5% to $73 a barrel. Asian trading on Wednesday was also dominated by the declines with Japan's Nikkei down nearly 4%. Trading platform IG saw the FTSE 100 in London opening 0.8% down - mirroring the fall seen in London the previous day. Michael Arone, chief strategist at State Street Global Advisors, said of the Nvidia-led falls: "Good just isn't good enough any more when it comes to Nvidia's earnings. Read more from Sky News: 'Positive' start to talks with business leaders on workers' rights EY compiles women-dominated shortlist for top UK post "There was just enough this quarter that wasn't perfect to cause people to sell. More broadly, the S&P is up 20% as of the end of August, and this is just another excuse to take profits from tech as valuations are high and growth rates are slowing. There is skepticism that all of that AI spending will not pay off in soaring revenues and earnings. "Then what's happened here is a bit of a cliché; everyone is returning from summer holidays, volumes are picking up and performance has been good entering what historically has been a seasonally weak period. September has been a losing month for stocks in the each of the last four years, and in six of the last 10 years. "So what I expect is that we'll see a continued rotation away from technology stocks leading the way to broader leadership. That's happening because interest rates and inflation are both falling and that should help to close the gap in earnings growth between the technology sector and the rest of the market."