Tech Giants Intel and Nvidia Face Stock Market Turbulence

Why Intel Stock Is Getting Crushed Today | The Motley Fool

Intel stock is losing ground today due to macroeconomic and geopolitical risk factors. Investors are worried that manufacturing weakness and a report on U.S. jobs numbers later this week could rattle the market, and concerns that China will invade Taiwan are back in the spotlight. Investors have been eagerly waiting for the Federal Reserve to cut interest rates, and it looks like the central banking authority is on track to deliver the long-awaited cut this month. But the latest data shows that U.S. manufacturing pulled back in August, and investors are now worried that the anticipated rate reduction won't be the macroeconomic market catalyst that had been expected. The Fed has been trying to get inflation under control while avoiding recession -- the heavily desired "soft-landing" scenario. Inflation has moderated substantially, but recent U.S. economic data on some other fronts has raised concerns that a soft landing may no longer be in the cards. Some recent economic data has come in weaker than expected, and earlier employment numbers have been subject to significant downward revisions. The U.S. Labor Department is expected to release jobs numbers for August, and big sell-offs for Intel stock and the market at large reflect worries that the numbers will point toward recession. Signs pointing to a potential Chinese invasion of Taiwan have been a recurring bearish catalyst for semiconductor stocks over the last year. While excitement surrounding artificial intelligence and other growth drivers has been enough to power big valuation gains for many chip companies, geopolitical risk remains a pressing concern for chip investors. Recent comments from the Taiwanese president have once again given those concerns center-stage positioning. In an interview on Sunday, Taiwanese President Lai Ching-te said that China should also try to get territory back from Russia if it's claiming a right to previous land holdings as its rationale for potentially reintegrating Taiwan. While the comment was likely made in jest as a way to highlight a perceived inconsistency in China's policy positioning, it also suggests that potentially aggressive moves from Tawain's more powerful neighbor are an immediate concern for the country's leader.

Why Nvidia Stock Is Plummeting Today | The Motley Fool

The artificial intelligence (AI) leader's share price is falling in response to rising concerns about the health of the U.S. economy. News out of China and other geopolitical dynamics are also prompting sell-offs for Nvidia and other chip stocks today. The U.S. Department of Labor is expected to release its latest employment data on Friday, and Wall Street is seeing an uptick in bearish sentiment ahead of the report. Investors have been looking forward to interest-rate cuts that are expected to be delivered by the Federal Reserve this month, and the rate reduction could be larger than many analysts initially expected. But there's a catch. Some analysts now expect that the Fed will cut interest rates by a full point this year. If so, that could be a sign that the central banking authority believes the economy is on track for a recession. Investors are bracing for a worrying jobs report at the end of this week, and Nvidia and other high-profile growth stocks are seeing big valuation pullbacks. In an interview on Sunday, Taiwanese President Lai Ching-te said that China should also move to reclaim land from Russia if it wants to officially make Taiwan its territory. Rather than suggesting that China should take back Russian land that used to be within its own borders, Lai was making a statement about whether the Chinese government was being logically consistent in some of its stated reasons for plans to exert greater control over Taiwan. Nevertheless, it looks like the comments from Taiwan's president are highlighting the risk that China could invade Taiwan at some point in the not-too-distant future. While the Chinese government has long made claims that Taiwan is already part of its territory, the contention has taken on added importance in light of the crucial role that Taiwan plays in semiconductor manufacturing and artificial intelligence trends. The island nation is home to Taiwan Semiconductor Manufacturing -- the leading contract manufacturer of semiconductors that's responsible for the fabrication of advanced chips for AI applications. Nvidia relies on TSMC for the fabrication of its chips, and any disruptions to the fab leader's output could have major implications for the company's performance.