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

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On Wed, 4 Sept, 5:15 AM UTC

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Asian and global markets experience a significant downturn following Nvidia's stock plunge and disappointing US economic data. Investors reassess tech valuations and economic growth prospects amid rising uncertainty.

Nvidia Sell-Off Triggers Market Turmoil

The global financial markets experienced a sharp decline, with Asian markets following Wall Street's downward trend. The catalyst for this market turbulence was the significant sell-off of Nvidia Corp shares, which plummeted by 4.7% 1. This sudden drop in Nvidia's stock price sent shockwaves through the tech sector and beyond, raising concerns about the sustainability of the AI-driven rally that has dominated market sentiment in recent months.

Weak US Economic Data Compounds Market Woes

Adding to the market's troubles, weak US economic data further dampened investor confidence. The US services sector showed signs of slowing down in August, with the Institute for Supply Management's non-manufacturing PMI falling to 54.5, below the expected 52.5 2. This unexpected dip in a key economic indicator raised concerns about the overall health of the US economy and its potential impact on global growth.

Asian Markets Bear the Brunt

The ripple effects of these events were felt strongly across Asian markets. Hong Kong's Hang Seng Index suffered a substantial 2.4% drop, while Japan's Nikkei 225 fell by 0.6% 3. The negative sentiment spread to other major Asian indices, with South Korea's Kospi and Australia's S&P/ASX 200 also experiencing significant declines.

Global Impact and Sector Analysis

The market downturn was not limited to Asia, as European and US futures also pointed to a lower open. The tech-heavy Nasdaq Composite index in the US fell 0.9%, while the S&P 500 dropped 0.4% 4. The sell-off in Nvidia had a cascading effect on other chipmakers and AI-related stocks, highlighting the interconnectedness of the global tech ecosystem.

Oil Prices and Economic Concerns

The market turmoil also affected commodity prices, with oil experiencing a slight decline. Brent crude futures fell 0.1% to $90.60 a barrel, while US West Texas Intermediate crude dropped 0.1% to $87.41 5. The fluctuation in oil prices reflected broader concerns about global economic growth and demand.

Investor Sentiment and Future Outlook

As markets grapple with these developments, investor sentiment has turned cautious. The combination of Nvidia's sell-off and weak US economic data has prompted a reassessment of tech valuations and growth prospects. Analysts are closely monitoring upcoming economic indicators and corporate earnings reports to gauge the market's direction in the coming weeks.

Central Bank Watch

With economic uncertainties on the rise, attention is turning to central banks' potential responses. The European Central Bank's upcoming meeting is now under intense scrutiny, as investors look for signs of how monetary policymakers might address the current market volatility and economic challenges.

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