No surprise that the markets are taking a little breather then, after reaching and exceeding new highs in recent weeks.
The S&P 500 fell by a little over 2%, the Dow Jones Industrial Average trimmed around 1.50%, and the Nasdaq Composite dropped 3.26%.
A variety of factors likely contributed to the market’s weakness on Tuesday 3rd September 2024
U.S. manufacturing activity continued to contract in August 2024, raising concerns about the strength of the U.S. economy again.
Nvidia‘s stock plummeted nearly 10%. The downturn also affected other semiconductor manufacturers in the U.S. and Asia. Intel’s shares fell by 8.8%, SK Hynix’s by over 7%, and Tokyo Electron’s by over 8.5%.
Furthermore, Nvidia‘s shares declined an additional 2% in extended trading amid news that the U.S. Department of Justice has begun an antitrust investigation into the company.
This bleak sentiment may have been influenced by market expectations. The Fed dithering about when to make an interest rate cut isn’t helping.
Historically speaking, September has been the worst month for the S&P 500. The index lost an average of 2.3% over the past 10 Septembers, according to FactSet data.
There are real reasons to feel concerned for the month. Fundstrat co-founder Tom Lee warned investors to be cautious for the next eight weeks and thinks stocks could pull back by 7% to 10%.
S&P 500 one-day chart
Nasdaq Composite one-day chart
