Nvidia stock crash and Zelensky office shake-up jolt markets
Nvidia, a giant in graphics processors and artificial intelligence, recorded a record drop in stock value. At the same time, attention was drawn to personnel changes in the office of Ukrainian President Volodymyr Zelensky on the international stage.
On Tuesday, Nvidia's shares, a leader in artificial intelligence, experienced a sharp decline. This is the largest single-day drop in market value in American companies' history.
The PHLX (Philadelphia Stock Exchange) index, which tracks companies' quotations in the semiconductor sector, recorded a drop of 7.75 percent. This is the largest single-day drop in this indicator since 2024. The current fluctuations in the AI market come after Nvidia presented a quarterly forecast last week that did not meet investors' high expectations.
Concerns about AI investment returns
Todd Sohn, an ETF strategist at Strategas Securities, explained the reasons for such a strong sell-off. He said that over the past 12 months, massive funds have been invested in the technology and semiconductor sector, leading to significant market imbalance. Concerns about the slow return on high AI investments also affect other tech giants.
Intel recorded a drop of nearly 9 percent following reports from Reuters about the company's restructuring plans. According to information, CEO Pat Gelsinger and key managers plan to present the board with a plan to eliminate unnecessary business areas and change the struggling chip manufacturer's investment strategy.
Red on the US stock exchange
Weakness in the chip sector coincided with broad declines on Wall Street. The Nasdaq index fell 3.3 percent, and the S&P 500 2.1 percent. According to the CME FedWatch tool, most investors expect the Federal Reserve to cut interest rates by 0.25 percentage points at the meeting on September 18th at 3:00 p.m. EST.
However, expectations for a 0.50-point cut rose to 37 percent from 30 percent after data indicated continued weakness in the manufacturing sector. This week, investors will receive a range of labour market data, with the key government employment report on Friday.
