September has started at a low for the stock markets. The Asia-Pacific markets fell sharply on Wednesday, witnessing their worst one-day loss since the August sell-off, following a steep plunge in Nvidia’s share price in the US overnight.
The fall in Asia’s tech and chip stocks was evident in the Nikkei 225 and Taiex indexes. Japan’s Nikkei 225 fell 4.24% to close at 37,047.61, while Taiwan’s Topix dropped 3.65% to 2,633.49.
Meanwhile, semiconductor-related stocks Renesas Electronics plunged 8.50%, Tokyo Electron lost 8.55%, and Advantest tumbled 7.74%. Arm’s parent company, Softbank Group, fell 7.73%. Samsung Electronics and SK Hynix lost 3.31% and 8.02%, respectively.
US stocks
The fall in the Asian stock markets followed a similar trend experienced by the US and global exchanges over the week.
On Tuesday, the Philadelphia Stock Exchange semiconductor index had its worst day since March 2020 on Tuesday, when COVID-19 hit. Meanwhile, the US three major indexes recorded their worst days since the August global sell-off. The Dow Jones Industrial Average fell 1.51%, the S&P 500 was down 2.12% and the Nasdaq Composite dropped 3.26%.
The main catalyst of the performance drop was the fall in the stock value of AI chipmaker Nvidia, which lost over 9% in regular trading. The drop in Nvidia stocks is believed to have dragged other counterparts along with it, such as Intel, AMD and Marvell.
The VanEck Semiconductor ETF (SMH) was down 7.5%, its worst day since March 2020.
Nvidia’s fall
This week, all eyes were placed on Nvidia, as the chipmaker experienced a $280 billion loss in market value due to the fall in its share value. This amounted to the worst loss by a company in one day of trading.
Nvidia shares continued sliding in post-market trading Tuesday, falling 2%, after Bloomberg reported that the company received a subpoena from the Department of Justice as part of an antitrust investigation.
Last week the AI chip leader sold off 7.7% following the publication of its Q2 2024 financial results. The earnings report revealed Nvidia had doubled its profits in the second quarter of 2024, reaching $165 billion and reporting higher-than-expected sales of $30 billion, a 122% annual increase. However, the results failed to impress investors, who expressed worries about slowing growth.
September is historically the worst month for the US stock market.
