Global stock markets experienced a decline on Tuesday, driven by concerns over high tech valuations, particularly with Nvidia’s earnings report looming. The tech giant’s stock dropped over 3% ahead of its quarterly earnings release, which is expected to provide insight into the health of the industry. Investors are questioning whether the significant investments in artificial intelligence will yield substantial returns, following this year’s record stock rally.
The US Federal Reserve’s potential decision on interest rates next month also weighed on the markets. Bitcoin briefly fell below $90,000 for the first time in seven months before recovering, as traders increasingly believe the Fed will not cut interest rates. The US jobs report, delayed due to the government shutdown, is scheduled for release on Thursday and will be closely watched for signs of a potential rate cut.
Retailers’ reports, including Home Depot, Target, and Walmart, will also provide insight into consumer sentiment. In Asia, Tokyo’s market tumbled as Prime Minister Sanae Takaichi prepared to unveil an economic stimulus package, which is expected to increase borrowing and lead to higher yields on government bonds. The yen slipped to its weakest level since January, with expectations of further interest rate hikes fading.
According to market analysts, Japan’s economic situation is a significant concern, with investors worrying that the government is mishandling the economy. Fawad Razaqzada, a market analyst with StoneX, noted that even reliable commodities like gold and copper have been affected by the sell-off. The global market decline was evident, with major indexes in Europe and the US experiencing significant drops.
Key figures at 1450 GMT showed the Dow down 0.9% at 46,169.20 points, the S&P 500 down 0.8% at 6,621.79, and the Nasdaq Composite down 1.2% at 22,432.39. In Europe, the FTSE 100, CAC 40, and DAX were down 1.3%, 1.1%, and 1.5%, respectively. The Nikkei 225 in Tokyo closed down 3.2% at 48,702.98.
The decline in stock markets is a significant development, with investors closely watching the upcoming earnings reports and economic data for signs of a potential turnaround. The situation in Japan and the US Federal Reserve’s decision on interest rates will continue to influence the markets in the coming days. As the global economy navigates these challenges, investors will be seeking clues on the health of the tech industry and the overall economic outlook.