Nvidia’s stock nosedived nearly 10% on Wednesday, adding to a global market slide fueled by fresh concerns over the U.S. economy.
The American chip giant, celebrated for its role in the AI boom, saw its shares plummet as enthusiasm for artificial intelligence cooled.
Yet despite the selloff, Nvidia’s stock remains twice as valuable as it was just a year ago.
The broader market was no stranger to turbulence either.
The FTSE 100, London’s leading index, slipped 0.55%, with Germany’s Dax down 1.41% and France’s Cac 40 falling nearly 1%.
Major Asian markets followed suit—Japan’s Nikkei plunged 4.2%, while South Korea’s Kospi and Hong Kong’s Hang Seng dropped 3% and 1.1%, respectively.
Investors are bracing for next week’s U.S. Federal Reserve meeting, where the focus is squarely on interest rate decisions.
With U.S. manufacturing data showing signs of sluggishness and Friday’s jobs report looming, market participants are left guessing how the Fed will react.
According to Julia Lee of FTSE Russell, growth concerns dominated the market moves, highlighting the anxiety rippling across global trading floors.
Tuesday’s selloff in the U.S. saw the S&P 500 shed over 2%, while the tech-heavy Nasdaq tumbled by more than 3%.
Nvidia, one of the Nasdaq’s heavyweights, bore the brunt of investor caution, losing 9.5% in value—a staggering $279 billion erased from its market cap.
Despite this short-term drop, the stock remains nine times its value from November 2022, when AI fervor kicked off with the launch of ChatGPT.
Other tech giants like Alphabet, Apple, and Microsoft were also caught in the downdraft, posting steep losses amid growing uncertainty.
Swetha Ramachandran, a fund manager at Artemis Investment Management, described Nvidia’s drop as a case of “expectations catching up with reality.”
While the AI leader reported impressive growth of 122% in Q2, it forecasts a slower 80% increase for the next quarter, signaling a natural deceleration.
Additionally, reports that the U.S. Department of Justice had subpoenaed the company over potential antitrust issues may have further unsettled investors, although the department declined to comment.
For Asian markets, the impact was particularly sharp as export-heavy economies faced the same global growth concerns.
While Japan’s Nikkei is up 12% year-over-year, markets in Shanghai and Hong Kong remain in the red.
As the world watches for more clues on the health of the U.S. economy, especially in Friday’s jobs report, business leaders and global investors are left balancing hope with hesitation.
You May Also Like:
