On Wednesday, U.S. stock markets ended lower, with the Dow Jones Industrial Average losing 159 points amid a broader market pullback driven by a decline in Nvidia’s shares. Nvidia’s performance weighed heavily on the tech-heavy Nasdaq Composite, which dropped 1.12%, while the S&P 500 fell by 0.6%. The Dow Jones finished down 0.39%, reflecting a decline of approximately 159 points.
Nvidia’s significant impact on the market highlights its growing influence, as the semiconductor giant, which briefly surpassed a $3 trillion market cap this year, currently accounts for about 7% of the S&P 500. Despite exceeding both revenue and net income expectations in its second fiscal quarter and offering a strong sales forecast for the next quarter, Nvidia’s stock dropped 7% in after-hours trading, as the results fell short of the lofty expectations held by investors.
Meanwhile, Salesforce shares surged 4% in extended trading after outperforming earnings estimates for its fiscal second quarter. The enterprise software giant also raised its full-year earnings forecast, boosting investor confidence in the company’s future prospects. Conversely, shares of cybersecurity firm CrowdStrike fell by over 2%, despite reporting better-than-expected earnings and revenue. The company lowered its full-year guidance following a global disruption in July, raising concerns among investors.
As Nvidia released its quarterly results on Wednesday evening, Nasdaq 100 futures fell by 0.9%, reflecting market disappointment. Futures for the S&P 500 also declined by 0.5%, while the Dow Jones Industrial Average futures remained relatively flat. This market reaction underscores the sensitivity of the broader market to high expectations in the tech sector, particularly in the context of increasing reliance on artificial intelligence.
Asian markets followed suit, with losses in the tech sector dragging down indices. Nvidia’s outlook, as a key player in the semiconductor industry, influenced major tech-heavy indices, such as South Korea’s Kospi, Hong Kong’s Hang Seng, and Taiwan’s index, which all dropped by 0.8%. Japan’s Nikkei fell by 0.2%, and the Topix index contracted by 0.3%.
Ongoing trade tensions between China and the West continue to weigh on global financial markets. Chinese indices, including the Shanghai Shenzhen CSI 300 and Shanghai Composite, faced slowdowns as concerns over recent tariffs imposed by Canada on China’s electric vehicle industry added to existing pressures from U.S. and EU tariffs. These tariffs have heightened fears of a new trade war, which could further strain the global economy.
Investors remain cautious about the long-term impact of these measures, not only on China’s automotive industry but also on broader economic relations between China and Western countries. This uncertainty has contributed to a subdued performance in Chinese markets, with investors closely watching for further developments.
In Australia, the ASX 200 index was also in negative territory, posting a 0.34% loss following the release of July’s Consumer Price Index (CPI) data. The CPI rose by 3.5%, slightly exceeding market expectations and well above the Reserve Bank of Australia’s (RBA) annual target of 2% to 3%. This increase has raised concerns among investors that persistent inflation could prompt the RBA to hike interest rates further.
The prospect of tighter monetary policy has unsettled the Australian stock market, as fears of an economic slowdown intensify. With the RBA already having implemented several rate hikes to combat inflation, the latest data makes an additional rate increase more likely. Such a move could dampen economic growth and further pressure Australian companies, particularly those sensitive to financing costs.
Futures Data (as of 12:43 AM EDT):
- E-Mini S&P 500 (Sep 24): 5,620.75 (+0.19%)
- Mini Dow Jones Industrial Average (Sep 24): 41,458.00 (+0.05%)
- Nasdaq 100 (Sep 24): 19,457.75 (+0.33%)
- E-mini Russell 2000 Index (Sep 24): 2,214.30 (+0.17%)
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