World stocks experienced a significant decline on Wednesday following Wall Street’s worst day since early August, driven by a 9.5% drop in Nvidia’s stock, leading to a global downturn in chip-related stocks.
In early trading, France’s CAC 40 slipped 0.8%, Germany’s DAX lost 0.8%, and Britain’s FTSE 100 dropped 0.8%. Japan’s Nikkei 225 suffered a 4.2% loss, with Tokyo Electron plunging 8.6%. South Korea’s Kospi was down 3.2%, with Samsung Electronics falling 3.5%. Taiwan’s Taiex lost 4.5%, impacted by Taiwan Semiconductor Manufacturing Company’s 5.4% decline. Australia’s S&P/ASX 200 dropped 1.9%, and Hong Kong’s Hang Seng index declined 1.1%, while the Shanghai Composite index shed 0.7%.
The decrease in oil prices was attributed to rising supply, particularly as Libya moved closer to resolving an oil revenue control conflict, potentially increasing its production.
The S&P 500, heavily influenced by Nvidia, fell 2.1%, erasing gains from a recent winning streak. The Dow Jones Industrial Average dropped 626 points, and the Nasdaq composite fell by 3.3%. Bond yields also faced setbacks after a report indicated a contraction in American manufacturing in August.
Timothy Fiore, chair of the Institute for Supply Management’s manufacturing business survey committee, mentioned concerns about subdued demand due to monetary policy and election uncertainty. Updates on U.S. job openings, service business growth, and job creation data in August are expected later in the week.
The S&P 500 closed at 5,528.93 on Tuesday, the Dow at 40,936.93, and the Nasdaq composite at 17,136.30. The 10-year Treasury yield dropped to 3.84%, down from 3.91%. In currency markets, the U.S. dollar traded at 145.17 Japanese yen and the euro at $1.1052.
