THE Nasdaq index slumped more than three per cent on Tuesday as Nvidia and other semiconductor equities retreated ahead of key jobs data later in the week.
The tech-focused Nasdaq finished at 17,136.30, down 3.3 per cent in the market’s first session in September following Monday’s holiday.
The Dow Jones Industrial Average fell 1.5 per cent to 40,936.93, while the broad-based S&P 500 shed 2.1 per cent to 5,528.93.
Stocks spent the entire session in red, giving back a portion of the gains over the last month.
“I think there’s just profit taking, kind of rebalancing going on there,” said Sam Burns, chief strategist of Mill Street Research. “And now that earnings season is over, there’s much less in terms of corporate news to drive things.”
The Institute for Supply Management’s manufacturing index was 47.2 per cent in August, up slightly from a month earlier, but still well below the 50-point mark separating expansion from contraction.
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ISM officials said demand remained subdued, leading to a fifth straight month of contraction.
The stock market losses come ahead of major employment data later in the week that will have a say in upcoming US monetary policy decisions.
The prior jobs report sparked a brief but dramatic sell-off in US equities, elevating recession fears before subsequent economic reports bolstered confidence.
Another weak jobs report would be a “significant headwind,” said Art Hogan, chief market strategist at B. Riley Wealth.
“Then you have two in a row and you start to be concerned about the future of the economy and jobs,” Hogan said.
Semiconductor shares Nvidia, Advanced Micro Devices and Intel all fell about eight per cent or more.
Boeing was another big loser, shedding 7.3 per cent following a downgrade by Wells Fargo.
While most Dow companies fell, Coca-Cola, Visa and Procter & Gamble were among the equities that defied the trend. AFP
