September is traditionally a bad month for the stock market, and it appears it won’t be any different in 2024. On the first trading day of the month on Tuesday, the US stocks sank amid a widespread selloff led by chipmaker Nvidia.
The blue-chip Dow Jones dropped by 1.51% or 626.15 points to close at 40,936.93. Benchmark S&P 500 closed at 5,528.93 after a 2.12% or 119.47 points slide, while tech-heavy Nasdaq Composite fell by 577.33 or 3.26% to 17,136.30 close.
Chip stocks had a particularly rough day, with Nvidia stumbling by 9.53% to close at $108.00 per share, its lowest since early August, before sinking by another 2.5% in the after-hours trading. The company’s stock continued to be on a downward trajectory after investors were less than impressed with what they perceived as an insufficient earnings beat.
Other semiconductor companies followed suit, with stocks of Broadcom, Qualcomm, and Taiwan Semiconductor Manufacturing Company all finishing in the red.
The stumbling stock market is likely a result of investors being cautious about the upcoming economic data that are expected to influence the Federal Reserve’s decision to cut interest rates. While a rate cut will certainly come in September, it is still unclear whether the Fed take the moderate route or decide on a more aggressive cut.