The global stock market took a hit on Wednesday morning as UK shares dropped following falls in Asian and US markets. Concerns about the world’s largest economy have investors on edge, with data showing US manufacturing activity remaining subdued.
One of the major casualties of the market downturn was American chip giant Nvidia, which saw its shares plummet by almost 10%. This sharp decline comes as optimism about the boom in artificial intelligence (AI) wanes, despite Nvidia’s shares still being worth double their value from a year ago.
The FTSE 100 index, along with major European indexes, also experienced losses in early trading. Market watchers are now eagerly awaiting the US jobs figures due on Friday, as well as speculating on how the Federal Reserve will respond when it meets to decide interest rate policy next week.
Julia Lee at FTSE Russell told the BBC, “Growth concerns are dominating market moves,” as major tech giants like Alphabet, Apple, and Microsoft also saw their shares tumble on Tuesday. The S&P 500 index closed more than 2% lower in New York, while the Nasdaq fell by over 3%.
In Asia, Japan’s Nikkei 225 was down 4.4%, South Korea’s Kospi dropped by 3%, and the Hang Seng in Hong Kong fell by 1.3%. Major Asian technology firms like TSMC, Samsung Electronics, and SK Hynix were also sharply lower.
The market downturn is being attributed to concerns around global growth, particularly hitting exporting countries in the region. Investors are anxiously awaiting next week’s interest rate decision in the US and Friday’s US jobs market report for further insights into the direction of the US economy.
Swetha Ramachandran, a fund manager for Artemis Investment Management in London, noted that Nvidia’s slide was a result of “expectations catching up with reality” for the AI giant. The firm recently reported a deceleration in growth, which may have contributed to the market reaction.
Additionally, reports that the US Department of Justice issued a subpoena to Nvidia over anti-trust issues could have further fueled the stock’s decline. The Department of Justice declined to comment on the matter, leaving investors on edge as they navigate the volatile market conditions.
