US Stocks Plunge: Global Markets Tumble, Nvidia Drops 10%, Nikkei Halts?

Recently, global stock markets have experienced severe fluctuations, and the U.S. stock market has also seen significant adjustments.

On September 4, 2024, NVIDIA's stock price plummeted by 9.5% in the U.S. market, with a market value loss of approximately $279 billion, setting the record for the largest single-day drop in market value for a U.S. company in history.

This decline not only affected NVIDIA itself but also triggered a chain reaction across the entire U.S. stock market, leading to a collective decline in the three major U.S. stock indices and the largest single-day drop since August 6.

Additionally, on August 5, 2024, the Japanese stock market experienced an epic crash, with the Nikkei 225 index triggering circuit breakers twice, recording the largest single-day drop in over four years.

Stock markets in South Korea, Europe, the United States, and other countries also saw sharp declines.

Against this backdrop, NVIDIA's stock price volatility is particularly eye-catching, as its status as a top global chipmaker gives it significant influence over global stock markets.

It is worth noting that NVIDIA's stock price fluctuations are not an isolated event but part of the global stock market turmoil.

Advertisement

The market has significant disagreements on whether the U.S. economy is heading towards a recession and whether there is a bubble in tech stocks.

The direct cause of the U.S. stock market's decline seems to be related to weak U.S. economic data.

According to reports from Caixin Global, the U.S. Institute for Supply Management (ISM) manufacturing index declined in July, initial jobless claims increased, and construction spending fell for two consecutive months, all of which were below market expectations, triggering concerns about a possible economic recession.

The Federal Reserve's interest rate cut expectations also affected market sentiment.

Although interest rate cuts are usually seen as good news for the market, the market's reaction this time has shown uncertainty and concern about the future economic outlook.

The decline in tech stocks reflects the market's reassessment of high-risk assets.

In a high-interest-rate environment, tech stocks' valuations are suppressed, especially for companies that rely on future growth expectations.

NVIDIA's stock price plummeted, with a market value loss of nearly 2 trillion yuan, setting a record for the largest single-day market value drop in U.S. stock market history.

This not only affected its own performance but also further dragged down other tech stocks, including giants such as Intel, Google, Netflix, Apple, Meta, Amazon, and Microsoft, all of which fell sharply, causing significant market fluctuations.

How the future trend of the U.S. stock market will affect the global capital market is a question worth pondering.

The fluctuations in the U.S. stock market often have a chain reaction on the global market, especially in the context of the current closely connected global economy.

Asian stock markets, including the A-share market, will also be affected by the fluctuations in the U.S. stock market.

Looking at the performance of the A50 and Chinese concept stocks, the A-share market may be affected by the fluctuations in the U.S. stock market, but the specific situation still needs to be observed based on the actual market reaction.

Why is the performance of European stock markets not as good as that of the United States?

This may be related to the fundamentals of Europe's economic growth.

Although the European economy successfully avoided a recession in 2023, its growth rate is still lower than that of the United States.

According to reports from The Paper, the 2024 European economic outlook shows that despite some economic challenges, the economic prospects for the European continent are more optimistic.

The volatility of European stock markets may be greater, which is related to the uneven economic recovery of European countries and the complexity of market sentiment.

Does the fundamental of the European economy support the long-term growth of the stock market?

Where are the investment opportunities in European stock markets?

According to the analysis of Wall Street banks, the European stock market is expected to reach new highs in 2024, thanks to the European Central Bank's loose monetary policy and expectations of economic recovery.

The decline in commodity prices such as oil, gold, and copper may be partly related to the slowdown in global economic growth.

According to the report "Forecast 2024: Second Half Macroeconomic Outlook and Commodity Trend Judgment," although commodity prices rose in the first half of the year, the market outlook for the second half still maintains a "trend upward" view, indicating that the market still expects economic recovery.

The impact of commodity price fluctuations on the global economy is profound.

The decline in prices may alleviate the import cost pressure of some countries, but it may also lead to a decrease in the income of exporting countries, affecting the global trade balance.

Price fluctuations may also affect investor sentiment, thereby triggering a chain reaction on stock and bond markets.

Will the downward trend of Asian stock markets continue?

According to the 2024 Asian market outlook from J.P. Morgan Private Bank Asia, Asian economies faced many challenges in 2023, but 2024 is expected to be a transitional year, with the market environment expected to further stabilize, paving the way for a more sustained recovery in 2025.

This indicates that although Asian stock markets may face short-term fluctuations, they are expected to gradually recover stability in the long run.

How about the resilience of the A-share market?

As the world's second-largest economy, China's economic resilience and potential are important support for the A-share market.

According to reports from Xinhua News Agency, China's economy achieved a growth of 5.2% in 2023, showing the strong resilience of China's economy.

This resilience is expected to build a solid foundation for the A-share market, making it show more outstanding resistance when encountering external shocks.

Can China's economic resilience provide strong support for the A-share market?

China's economic resilience is not only reflected in its growth rate but also in its ability to adjust its structure and innovate.

As pointed out by the website "Qiushi," China's economy is resilient, has great potential, and is full of vitality, which is a strong guarantee for achieving modernization with Chinese characteristics.

This resilience and vitality will undoubtedly provide long-term support for the A-share market.