Nvidia leads Nasdaq down in rough start to September

Published On Sep 3, 2024, 3:30 PM

September began with a significant drop in stock prices, notably in tech shares like Nvidia, which fell nearly 10% after a disappointing earnings report, reigniting concerns about the AI sector. The broader market showed steep declines with the Dow down 1.5%, S&P 500 down 2.1%, and Nasdaq down 3.3%. Investors are closely monitoring incoming economic data, particularly the August jobs report, which could influence the Federal Reserve's decisions on interest rate cuts amid signs of a slowing labor market. The article highlights a cautious mood among traders as they brace for historically challenging September market conditions.

Stock Forecasts

Given the recent sell-off in Nvidia's stock amid declining investor confidence in tech, especially AI sectors, along with negative sentiment affecting other semiconductor companies, it is likely that these stocks will continue to face downward pressure until clearer signals about economic recovery or robust AI demand emerge.

With the ongoing volatility and negative sentiment in both the tech sector and overall market, ETFs that have a significant allocation to technology and AI stocks may also experience declines. This could lead to further underperformance in the short term as market participants seek defensive plays amid economic uncertainty.

On the flip side, sectors perceived as defensive, such as consumer staples and utilities, may attract more investors looking for stability during turbulent times. Stocks in these sectors could perform better relatively as equity investors rotate away from high-growth areas.

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