4:15pm: Stocks plummet
It was a rough day for equities in the first trading session of September driven by a selloff in tech stocks, led by a 9.5% drop to $108 in chipmaker Nvidia.
The tech-laden Nasdaq led the declines, down 3.3% at 17,136 points. The Dow Jones shed 1.5% at 626 points at 40,936 points and the S&P 500 was down 2.1% at 5,529 points.
2:20pm: Nvidia losing steam
Shares of Nvidia were losing steam to start the fourth quarter of 2024, but most analysts are still bullish on the longer term fundamentals.
Nvidia's earnings report and management commentary last week was the “missing piece” for the AI revolution bull thesis, analysts at Wedbush believe.
Shares of Nvidia traded down 7.8% at $110 in the early afternoon on Tuesday after investors spent the long weekend weighing up the chipamaker's underwhelming profit guidance.
“While the initial reaction to these robust earnings/guidance from the Godfather of AI Jensen and Nvidia was muted, we believe the underlying enterprise demand for AI is way outstripping supply and with Blackwell delay fears allayed we do not see anything getting in the way of this AI Revolution heading into year-end,” analysts wrote in a note to clients.
They see AI starting with NVIDIA but the broader ramifications for the tech sector as a “4th Industrial revolution” being built out across semis, software, infrastructure, Internet, and smartphones over the next 12 to 18 months.
However, Nvidia stock had lost 9.8% by Tuesday afternoon in New York.
12:30pm: Tech rout kicks off tough September
Nvidia and other chip stocks led a broader tech decline, marking a rocky start to September, a historically tough month for markets.
At around noon, the Nasdaq had pulled back 2.4%, leading the market decline, while the S&P 500 dropped 1.4%, and the Dow Jones slid 1%, losing over 400 points.
Investors are bracing for potential economic shocks and monitoring the upcoming August jobs report, which could influence the Federal Reserve's decision on interest rate cuts. Meanwhile, concerns about a broader economic slowdown persist, as manufacturing data showed signs of contraction.
11:15pm: Negative September?
A drop in US indices thus doesn't come as a surprise as US traders return after Labor Day, says Axel Rudolph, Senior Technical Analyst at online trading platform IG.
Historically, the US stock markets tends to end in negative territory in September, Rudolph noted.
"US employment data culminating in non-farm payrolls on Friday might add to the mix and add further pressure to indices which tend to decline in September," he added.
9:55am: Stocks drop at the open
A 5% fall for Nvidia and Intel rocked the Nasdaq as Wall Street started September trading firmly on the back foot.
The tech-heavy Nasdaq Composite index slid 1.3% in the first half hour.
The S&P 500 dropped 1% and the Dow Jones by 0.8%, while the small and mid-caps of the Russell 2000 rose 0.7%.
Tech giants Apple and Alphabet also fell over 1%, while semiconductor sector players like AMD and Broadcom fell 3% and 4% respectively.
7am: Nasdaq set to begin September on back foot
Nvidia and the Nasdaq are set to lead US stock benchmarks lower on Tuesday as Wall Street reopens after the long weekend for its first trading day of September.
Nasdaq futures were pointing to a 0.8% decline, while S&P 500 futures and those for the Dow Jones were both down 0.5%.
Nvidia was down almost 2% in pre-market trading, with other microchip groups AMD and Super Micro Computer down 1.5%.
Other tech giants were mixed, with Apple, Microsoft and Amazon down 0.35% pre-market, Meta down 1%, and Tesla up slightly.
This follows a strong finish to the past week, when the Nasdaq Composite jumped 1.1%, the S&P rose 1% and the Dow added 0.55%.
This spike, which saw the S&P 500 within kissing distance of its all-time highs, was boosted by "window dressing", says market strategist Kenny Polcari at Slatestone Wealth, by money managers in the final 10 minutes of trading at the end of the month, pushing stocks up to make it seem like "the angst seen at the beginning of the month is all but a distant memory".
Although the August to October period tends to be a seasonally weak time of year for stocks, Polcari said the VIX volatility index remaining close to the trendlines it has hugged for most of the past year (apart from the massive spike in early August), this "suggests complacency".
Scope Markets analyst Joshua Mahony says the jittery trading in the Europe session was due to traders moving "with caution in anticipation of the key economic data due in the days ahead", including the US manufacturing data today.
"Elsewhere, this week looks to gradually build towards Friday’s jobs report, with traders on the lookout for additional signs of a potential impending recession.
"Coming off the back of a surprise jump in unemployment that saw the key metric rise to the highest rate since October 2021, the trajectory of unemployment will be crucial in determining the market expectations for the Fed going forward."