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The Dow tumbled over 600 points on Tuesday as disappointing performances from tech and AI stocks rattled investors, and fresh economic data resurfaced fears about the United States’ economic health.
Investor anxiety has intensified over whether the Federal Reserve will cut interest rates in September, reflecting growing impatience in the market. This week’s upcoming job reports are highly anticipated, as they could provide crucial insights into the Fed’s next move on interest rates. The data may offer a clearer picture of the U.S. labor market, potentially influencing the Fed’s decision and shaping market expectations for the remainder of the month.
As the day ended, the Dow plunged 626 points, or 1.5%, to 40,939. The Nasdaq dropped 3.2%, while the S&P 500 declined 2%.
Meanwhile, fresh economic data highlighted potential weaknesses in the U.S. economy. The Institute for Supply Management (ISM) reported that U.S. manufacturing activity in August fell short of expectations, with the ISM manufacturing index coming in at 47.2%. Although this was a slight improvement from July’s reading, it still trailed analysts’ forecast of 47.9%, stoking fears of slowing economic growth.
AI stocks disappointed, but SMCI went up
Nvidia, a darling stock of the AI sector, plummeted by over 9%. Micron Technology and Advanced Micro Devices also took significant hits, with each losing more than 7% of their value. In contrast, Super Micro Computer rebounded, gaining 2% after the company reassured customers and partners in response to a critical report from Hindenburg Research. The company stated that the report was misleading and contained false or inaccurate information, and it will address the report in due course.
Trump Media stock keeps sinking
Trump Media & Technology Group stock has been on a downward trend for weeks, hitting new low after new low for much of August. As the markets opened after Labor Day weekend, Trump Media sunk even further.
Shares of Trump Media, the company behind former President Donald Trump’s Truth Social, dropped more than 7%. Since its debut on the Nasdaq on March 26 under the ticker DJT, the company’s market value has plunged nearly 69%.