Global Stock Market Decline

Stock Market Performance

　　Yesterday (September 4), the S&P 500 index fell by 2.1%, giving back part of its gains from the previous three weeks and nearing historical highs. The Dow Jones Industrial Average dropped 626 points, or 1.5%, retreating from the record set last Friday. The Nasdaq Composite Index declined by 3.3%, with Nvidia and other major tech stocks leading the drop.

　　Image Source: caltech

Nvidia and Semiconductor Stocks

　　Nvidia fell by 9.5% on Tuesday. Despite surpassing high expectations in its latest earnings report, the company's stock still struggled. This underperformance may intensify criticism that Nvidia and other major tech stocks have “soared too high” amid Wall Street's frenzy over artificial intelligence technology. Semiconductor-related stocks globally also declined on Wednesday.

　　In the bond market, the yield on the 10-year Treasury note dropped after a report showed U.S. manufacturing contracted again in August, weighed down by high interest rates. Manufacturing has been contracting for most of the past two years, and August's performance was worse than economists had expected. Timothy Fiore, chair of the Institute for Supply Managements manufacturing business survey committee, stated, “Demand remains subdued as companies are unwilling to invest in capital and inventory due to current federal monetary policy and election uncertainty.”

Economic Data Expectations

　　Reports due later this week might indicate how much help the economy needs, including updates on the number of job openings advertised by U.S. employers at the end of July and growth in U.S. services businesses last month. The highlight of the week is expected to come on Friday when a report will show how many jobs U.S. employers created in August.

　　Overall, the S&P 500 fell 119.47 points to 5,528.93. The Dow Jones Industrial Average dropped 626.15 points to 40,936.93, and the Nasdaq Composite Index declined 577.33 points to 17,136.30.

　　In the bond market, the yield on the 10-year Treasury note fell from 3.91% late Friday to 3.84%. This is a significant decline from 4.70% in late April, marking an important change for the bond market.

　　In currency trading, the U.S. dollar was nearly unchanged at 145.48 Japanese yen. The euro was priced at $1.1054, up from $1.1043.