- S&P 500 and Nasdaq fell over 2% and 3%, respectively.
- Dropped 9.5%, losing $279 billion in market value.
- Nikkei 225, Kospi, and Hang Seng all declined.
- Major US and Asian tech stocks fell sharply.
UK shares fell on Wednesday morning, following declines in Asian and US markets amid growing concerns about the global economy. Recent data indicated that US manufacturing activity remains weak, shifting investor focus to upcoming US jobs figures scheduled for Friday.
American chipmaker Nvidia experienced a significant drop, with its stock falling nearly 10% as enthusiasm over the artificial intelligence (AI) sector waned. Despite this sharp decline, Nvidia’s shares are still valued at twice their price from a year ago.
The FTSE 100 index, which includes the largest companies on the London Stock Exchange, fell by 0.76% in early trading on Wednesday, following declines in major European indexes. Market participants are closely watching how the Federal Reserve will adjust interest rate policy when it meets next week, as growth concerns continue to impact market movements, according to Julia Lee from FTSE Russell.
In New York on Tuesday, the S&P 500 closed more than 2% lower, and the Nasdaq, heavily weighted with technology stocks, dropped over 3%. Nvidia, listed on the Nasdaq, saw a significant decline of 9.5%, reducing its market valuation by $279 billion (£212.9 billion). Despite this drop, Nvidia’s shares remain valued at nine times their price from November 2022, when interest in AI surged following the launch of ChatGPT, driving up demand for its chips.
Other major US tech companies, including Alphabet, Apple, and Microsoft, also experienced declines in their stock prices on Tuesday. In Asia, Japan’s Nikkei 225 closed 4.2% lower, South Korea’s Kospi lost more than 3%, and the Hang Seng Index in Hong Kong fell by 1.1%. Major Asian tech firms like TSMC, Samsung Electronics, SK Hynix, and Tokyo Electron also saw sharp declines.
Asian markets have generally underperformed over the past year, with the Shanghai and Hong Kong indexes showing losses. However, Japan’s Nikkei has risen by 12% over the same period. Julia Lee noted that global growth concerns are particularly affecting exporting countries in the region.
Investors are awaiting the US jobs report on Friday for additional insights into the US economy’s trajectory. Swetha Ramachandran, fund manager at Artemis Investment Management, suggested that the recent declines in US shares reflect growing skepticism about the Federal Reserve making significant interest rate cuts. She also noted that Nvidia’s recent drop may be due to “expectations catching up with reality,” following the company’s projection of slower growth. Additionally, Nvidia’s slide might be related to reports of a subpoena from the US Department of Justice over anti-trust issues, although the Department of Justice declined to comment.
