UK stocks dropped on Wednesday morning after declines in Asian and US markets, as worries about the global economy grew, according to the BBC. New data showed that US manufacturing activity remains weak, and investors are now awaiting US jobs figures due on Friday.
Nvidia, a major US chipmaker, was hit particularly hard, with its shares falling nearly 10%. Despite this drop, the BBC notes that Nvidia’s stock is still worth twice as much as it was a year ago.
The FTSE 100 index in the UK fell by 0.55% by lunchtime, and other major European indexes also went down. Germany’s Dax dropped 1.41%, France’s Cac 40 fell almost 1%, and Spain’s Ibex was lower by 0.51%. The BBC reports that market watchers are speculating on how the US Federal Reserve will adjust interest rates next week.
In New York, the S&P 500 index ended over 2% lower, and the Nasdaq, which includes many tech stocks like Nvidia, fell more than 3%. Nvidia’s stock fell by 9.5%, losing $279 billion in value. Despite this recent slump, Nvidia shares are still nine times their price from November 2022, when interest in AI surged, according to the BBC.
Asian markets also struggled, with Japan’s Nikkei 225 down 4.2%, South Korea’s Kospi losing more than 3%, and Hong Kong’s Hang Seng dropping 1.1%. Major Asian tech companies, including TSMC and Samsung Electronics, saw sharp declines. The BBC explains that global growth concerns are hitting exporting countries hard.
Investors are now waiting for the US jobs report on Friday and next week’s interest rate decision from the Federal Reserve for more clues about the economy’s direction.
Swetha Ramachandran, a fund manager, told the BBC that Nvidia’s recent drop reflects a reality check after its high growth rates.
She also mentioned that Nvidia might be reacting to reports of a US Department of Justice subpoena related to antitrust issues, although the Department of Justice has not commented.
Credit : BBC
https://www.bbc.com/news/articles/crlrw01g45ro