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US Stocks Swing Sharply as Nvidia’s Decline Sparks Market Correction Concerns
The US stock market saw sharp volatility as global sell-offs hit Asia and Europe. The S&P 500 dropped 1.5% before recovering to a 0.2% loss, while the Dow and Nasdaq also fell. Nvidia’s steep 3.7% drop, extending its monthly decline to over 10%, drove much of the pressure amid concerns of an AI bubble. Asian and European indices tumbled, Bitcoin slipped, and markets now await Nvidia’s quarterly results.
The US stock market experienced significant volatility. The sell-off in Asia and Europe also impacted Wall Street. The S&P 500 fell 1.5% early in the day. Most of the losses were later recovered, and by late evening, it was down only 0.2%. The Dow Jones index fell 0.6%, while the Nasdaq fell 0.5%. Beyond the US, Asian and European markets also saw significant declines. Japan's Nikkei fell 3.2%, and South Korea's Kospi fell 3.3%. France's CAC 40 also fell 1.9%.
According to reports, the biggest pressure on the stock market on Tuesday was caused by the share prices of Nvidia, a computer chip maker. After initially falling 1.4%, it fell by 3.7% in the morning. The total decline this month has exceeded 10%. Experts in economic matters and stock market data are referring to this as a "correction" in Wall Street parlance. Nvidia's fluctuations directly impacted the entire market, as the company is the most influential stock in the S&P 500 due to its sheer size. The company's market value recently reached $5 trillion due to rapidly growing demand for AI chips.
The US stock market has seen a strong rally since April this year. Despite investor enthusiasm following President Trump's tariffs, critics felt this rally was unusual and unbalanced. In particular, in the AI sector, Nvidia has doubled its value four times in the past five years. Another company, Palantir, doubled its value in just six months this year.
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According to a survey conducted by Bank of America regarding the current market situation, large investors believe the stock market could rise sharply in the coming days. However, 45% of investors consider an "AI bubble" to be the biggest potential risk. There is also concern that companies are investing excessively in AI and data centers, raising concerns that similar profits cannot be expected in the future.
In addition to Nvidia, other high-flying sectors also weakened during Tuesday's trading. Bitcoin prices fell below $90,000 in the morning, after peaking at around $125,000 last month. Later, they rose slightly to above $93,000. The market is now focused on Nvidia's quarterly report on Wednesday. This could halt the decline in stock prices, while the possibility of a rebound remains.
