The S&P 500 fell over 2%, and the Nasdaq Composite dropped more than 3%, marking their largest daily declines since early August. Investors pulled back on their enthusiasm for AI-related stocks, contributing to a broad sell-off.
Chip stocks were particularly affected, with Nvidia seeing a nearly 10% drop, leading the PHLX chip index to slump by 8%. The market was also influenced by weaker-than-expected economic data, with the ISM manufacturing index showing a contraction for the fifth consecutive month. This reinforced fears of a potential recession, especially as crude oil prices dipped below $70, which could indicate declining demand.
Volatility spiked, as evidenced by the VIX closing above 20, reflecting growing investor concerns. The nervousness in the market followed a strong performance in late August, when the S&P 500 and Dow Jones hit record highs. Despite the recent rally, there are increasing worries that the AI-driven momentum may not sustain if companies do not demonstrate the tangible benefits of their AI investments.
In summary, today's market reflected a mix of economic anxieties, seasonal pessimism, and a reassessment of AI's potential, leading to a sharp decline in stock prices.
Chip stocks were particularly affected, with Nvidia seeing a nearly 10% drop, leading the PHLX chip index to slump by 8%. The market was also influenced by weaker-than-expected economic data, with the ISM manufacturing index showing a contraction for the fifth consecutive month. This reinforced fears of a potential recession, especially as crude oil prices dipped below $70, which could indicate declining demand.
Volatility spiked, as evidenced by the VIX closing above 20, reflecting growing investor concerns. The nervousness in the market followed a strong performance in late August, when the S&P 500 and Dow Jones hit record highs. Despite the recent rally, there are increasing worries that the AI-driven momentum may not sustain if companies do not demonstrate the tangible benefits of their AI investments.
In summary, today's market reflected a mix of economic anxieties, seasonal pessimism, and a reassessment of AI's potential, leading to a sharp decline in stock prices.