On Wall Street, stock prices sharply fell on Tuesday, particularly in the technology sector, marking a gloomy start to September, which is considered one of the worst months for the capital market.
The Dow Jones index slid 1.51 percent to 40,936 points, while the S&P 500 plummeted 2.12 percent to 5,528 points, and the Nasdaq index fell 3.26 percent to 17,136 points. On Monday, the largest stock exchange in the world was closed due to a holiday in the U.S., and on Tuesday, stock prices fell in nine of the 11 most important sectors of the S&P 500 index.
The largest declines were in the technology sector, where the so-called ‘seven giants’ stocks, which have led price growth in recent years, were under pressure. Nvidia’s stock price plummeted nearly 10 percent, causing the chip manufacturer to lose almost $280 billion in market value. Alphabet’s stock price fell by 3.6 percent, Apple’s by 2.7 percent, and Tesla and Microsoft’s by about 1.6 percent.
Investors were focused on the report about industrial activity in August in the U.S., which showed that the growth of the world’s largest economy is slowing down. In recent weeks, stock prices on Wall Street have risen sharply as investors believe that the economy will avoid recession despite rising interest rates. The market is also supported by investors’ belief that the U.S. central bank will lower interest rates in September. The prevailing sentiment in the market is that the Fed will cut rates by 0.25 percentage points, although some expect a sharper cut of 0.50 percentage points. Although a reduction in the cost of money is forthcoming, which should stimulate economic growth, September has started poorly. Analysts remind us that data since the 1950s has shown that September is one of the weakest months for the capital market.
– Everyone is writing about how September is a terrible month, and it seems that this narrative feeds itself, negatively impacting investor sentiment – says Jason Browne, president of Alexis Investment Partners.
