Stocks, oil, and tech hit as economic concerns grow
Manufacturing US contracts: S&P 500 down 2.1%, European markets drop 1%, Asia sees tech losses, oil prices fall under $70.
United States
In the U.S., economic data has been a mixed bag, with particular weakness in the manufacturing sector. The Institute for Supply Management (ISM) reported a contraction in U.S. manufacturing for August, continuing a trend that has persisted for nearly two years. New orders declined, and rising inventories pointed to a deepening slowdown. Despite this, there was a modest improvement in employment figures within the sector. The S&P 500 dropped 2.1%, the Dow Jones Industrial Average fell 1.5%, and the Nasdaq Composite decreased by 3.3%. Treasury yields also decreased, with the 10-year yield falling to 3.84%, down from 4.70% in late April.
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Europe
European markets reflected a similar trend, with significant losses across major indices. France’s CAC 40, Germany’s DAX, and Britain’s FTSE 100 all dropped by 0.8% during early trading. In the Eurozone, manufacturing accounts for 15% of GDP, and the recent data painted a somber picture, despite the service sector showing signs of resilience. European stocks dropped by 1%, reflecting a continuation of the manufacturing sector’s struggles. The Stoxx Europe 600 fell by 1%, and Germany’s 10-year yield declined by four basis points to 2.24%.
Asia
In Asia, markets suffered steep declines, particularly in technology-heavy indices. Japan’s Nikkei 225 plunged by 4.2%, with significant losses in electronics and semiconductor stocks. Tokyo Electron, a major player in this sector, saw its stock price drop by 8.6%. South Korea’s Kospi fell by 3.2%, driven down by a 3.5% loss in Samsung Electronics. Taiwan’s Taiex experienced the largest drop, plummeting by 4.5%, with Taiwan Semiconductor Manufacturing Company (TSMC) leading the decline at 5.4%. Australia’s S&P/ASX 200 dropped by 1.9%, while Hong Kong’s Hang Seng index declined by 1.1%, and the Shanghai Composite fell by 0.7%.
Oil Markets
Oil prices faced downward pressure due to concerns about global manufacturing and potential increases in supply. U.S. crude oil prices fell below $70 per barrel for the first time since January, and Brent crude dropped to $73.00 per barrel. The recent drop is partly due to the resumption of Libyan oil supply following a conflict resolution, alongside worries about China’s economic slowdown, which could dampen future oil demand.
Currency and Cryptocurrency Markets
In currency markets, the U.S. dollar index saw some fluctuations but remained relatively stable. The Japanese yen strengthened slightly to 145.09 per dollar, reflecting ongoing tightening by the Bank of Japan. The euro was steady at $1.1046, while the British pound held at $1.3114. Cryptocurrencies faced declines, with Bitcoin falling by 2.8% to $56,575.39, and Ether dropping 2.6% to $2,399.7.
Corporate Highlights
Nvidia’s stock fell sharply by 9.5% on Tuesday, contributing to the broader selloff in global tech stocks. This decline continued with an additional 1% drop in after-hours trading, following reports of a U.S. Department of Justice antitrust investigation. The chipmaker’s slump led to a significant loss in market value, contributing to broader market declines across major global indices.
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