As concerns about a potential recession arise, Nvidia saw its stock price fall by 9.5% on Tuesday. The slide wiped $278.9 billion in value off the chipmakers off, the biggest single-day loss in market capitalization ever experienced by a US company.
The volatility has been felt across the board as other chip makers like AMD, Qualcomm, and Intel have seen stock declines. The price of Bitcoin also slumped amid the news of faltering US and Asian markets.
Nvidia’s stocks fell 2.4% in the hours after Bloomberg reported that the US Department of Justice had sent the company a subpoena as it escalated its investigation into antitrust laws.
While this is coming at a time when AI and technology appear to be booming, there are worries about the health of the industry and the US economy.
This comes after weak ISM manufacturing data was released on Tuesday (September 3), with weaker-than-expected data about U.S. jobs already published at the start of August.
While September has historically been a tough month for stocks, some are worried about a slowdown with analysts predicting more uncertainty.
After the manufacturing data was revealed, UK investment giant Hargreaves Lansdown’s head of money and markets Susannah Streeter said: “deep concerns rippled out from Wall Street over the risks of an American recession.”
Senior equity analyst Matt Britzman also explained the situation in a morning note: “…Couple that with political and geopolitical uncertainty, and investors are likely in for a choppy month.”
All eyes are on the next few months following Nvidia stock fall
On Friday, the US Bureau of Labor Statistics is expected to release the monthly employment figures for August. There are thoughts that this will come in around 162,000 jobs for the month, but Streeter said this could amplify concerns if the figure is lower.
“…if they are significantly lower than expected, it will do little to calm fears that a recession could be looming…
“A better-than-expected number would lead to a reassessment of the pace of rate cuts, which may also hurt sentiment for some sectors, given how much high borrowing costs have been weighing on smaller companies for example, or infrastructure and real estate firms.
“If the data shows the solid labor market is weakening moderately but not shrinking sharply, it may help calm sentiment.”
Featured Image: Via Ideogram
The post Nvidia stock takes biggest single-day loss ever experienced by a US company appeared first on ReadWrite.