Overnight US Stocks | "Bad September" is here! NVIDIA drags down tech stocks, Nasdaq plunges over 3%

According to CNBC, on Tuesday, new economic data once again raised concerns about the health of the economy, with the U.S. stock market starting September on a weak note and technology stocks collectively plummeting. The Dow fell more than 650 points intraday. The S&P 500 index dropped more than 2%, with the VIX panic index surging 30%. The Nasdaq fell more than 3.2%, marking the worst day for global stock markets since the plunge on August 5. NVIDIA, a darling of artificial intelligence that has been closely watched by investors for over a year, saw its stock price drop by over 9%, leading to pressure on semiconductor stocks.

Earlier data showed that the final value of the U.S. August S&P Global Manufacturing PMI slipped, while the U.S. August ISM Manufacturing Index also fell short of economists' expectations. Larry Tentarelli, Chief Technical Strategist at Blue Chip Trends Report, said, "The market seems very sensitive to any data at the moment." "We have become a market that is very dependent on data."

[U.S. Stocks] As of the time of writing, the Dow closed down 626.15 points, or 1.51%, at 40936.93 points; the Nasdaq fell 577.33 points, or 3.26%, to 17136.30 points; the S&P 500 index dropped 119.47 points, or 2.12%, to 5528.93 points. NVIDIA (NVDA.US) fell 9.5%, Intel (INTC.US) dropped nearly 9%. Apple (AAPL.US) fell 2.7%. The Nasdaq Golden Dragon Index closed down 0.86%, XPeng (XPEV.US) rose 4%, Alibaba (BABA.US) fell 1%.

[European Stocks] Germany's DAX30 index fell 169.53 points, or 0.90%, to 18754.95 points; the UK's FTSE 100 index dropped 66.51 points, or 0.80%, to 8297.33 points; France's CAC40 index fell 71.32 points, or 0.93%, to 7575.10 points; the Euro Stoxx 50 index dropped 60.02 points, or 1.21%, to 4913.05 points; Spain's IBEX35 index fell 121.30 points, or 1.06%, to 11274.00 points; Italy's FTSE MIB index fell 457.60 points, or 1.33%, to 33863.00 points.

[Asia-Pacific Stock Markets] The Nikkei 225 index edged lower, while the Jakarta Composite Index in Indonesia fell by 1.01%.

[Gold] COMEX gold futures fell 0.12% to $2524.5 per ounce; COMEX silver futures fell 1.95% to $28.375.

[Cryptocurrencies] Bitcoin fell by over 1.8% to $58047.42, while Ethereum dropped over 3% to $2460.85.

[Crude Oil] U.S. WTI crude oil futures fell nearly 4.4% on Tuesday, erasing all gains for the year. With weak oil demand and the prospect of increasing supply, oil prices came under pressure. The October delivery WTI crude oil futures on the New York Mercantile Exchange fell $3.21, or 4.36%, to close at $70.34 per barrel, wiping out gains for the year and hitting the lowest level since December 12, 2023. Brent crude oil fell below $75 per barrel, erasing all gains for 2024 【Metals】 Most London metals fell, with London copper down 2.48%, London nickel down 1.53%, London aluminum down 0.33%; and London zinc up 0.42%.

【Macro News】

U.S. August Manufacturing PMI Rebounds from Eight-Month Low but Trend Remains Weak. The U.S. manufacturing index rebounded from an eight-month low set in July in August, as employment improved, but the overall trend still indicates subdued manufacturing activity. The Institute for Supply Management (ISM) reported on Tuesday that the August Manufacturing PMI was 47.2, up from the lowest level since November at 46.8 in July. The PMI has been below the threshold of 50 for the fifth consecutive month, but above 42.5, a level that ISM believes generally indicates gradual expansion in the overall economy in the future. Hard data such as manufacturing production and business equipment spending indicate that manufacturing is essentially stagnant. The sub-index for new orders fell to 44.6. Output further declined, with the production sub-index dropping to 44.8. Despite sluggish orders, manufacturers are facing rising input product prices, possibly due to surging freight costs. The sub-index measuring prices paid by manufacturers rose from 52.9 in July to 54.0, indicating that the current commodity deflation may have ended, but may not have a substantial impact on the slowing inflation. Employment continued to shrink, but at a slower pace, with the employment sub-index rising to 46.0.

Libyan Central Bank Governor Says Factions Close to Agreement, Oil Production Recovery Expected. Libyan Central Bank Governor Sadiq Al-Kabir stated on Tuesday that there are "strong" signs that various political factions are close to reaching an agreement to break the current deadlock. Reconciliation between the various factions in Libya would pave the way for over 500,000 barrels of oil supply to return to the global market daily. Al-Kabir had been targeted by the western government, prompting the eastern authorities to cut crude oil production. Although Al-Kabir fled Libya after being threatened by armed groups, he stated in an interview in Istanbul, Turkey, that he believes he will be part of any solution and is prepared to return to Libya. He said, "If they sign an agreement today, I will return tomorrow." It is not yet clear whether the internationally recognized western government of Libya will agree to Al-Kabir's return. Before the production halt order issued on August 26, Libya's daily oil production was around 1 million barrels, with the vast majority coming from the eastern region. Over the past week, daily production has plummeted to around 450,000 barrels.

Goldman Sachs: Gold Has the Greatest Potential for Price Increase in the Near Term. Goldman Sachs believes that gold has the highest potential for price increase in the near term as it is the preferred risk hedge tool, while other commodities are "more selective and lack constructive elements." Analysts at Goldman Sachs stated in a report titled "Go for Gold" on Monday, "The expected rate cut by the Federal Reserve is likely to bring Western capital back to the gold market, a factor that has not been seen during the significant gold price increases of the past two years." Goldman Sachs has adjusted the target price for gold to touch $2,700 by early 2025, previously forecasted for the end of 2024, citing price sensitivity in the Chinese market. The bank believes that price sensitivity can also prevent a significant price drop assumption, which may boost purchasing demand in the Chinese market 【Stock News】

NVIDIA (NVDA.US) Receives Subpoena from U.S. Department of Justice, Antitrust Investigation Intensifies. According to reports, the U.S. Department of Justice has issued subpoenas to NVIDIA and other companies to seek evidence of NVIDIA's violation of antitrust laws, reflecting an escalation in the investigation. Sources revealed that previously, the Department of Justice only issued questionnaires to relevant companies, but now they have issued legally binding requests for the recipients to provide information. This indicates that the government's investigation is one step closer to formal litigation. Insiders stated that antitrust officials are concerned that NVIDIA is making it harder for customers to switch to other suppliers and punishing buyers who do not exclusively use its artificial intelligence chips. Representatives from the Department of Justice and NVIDIA have both declined to comment.

TSMC (TSM.US) Developing Next-Generation Silicon Photonics Technology, Aiming for Production in Three to Five Years. According to Nikkei News, TSMC is intensively developing a new generation of silicon photonics solutions with top global chip designers and suppliers, aiming for production within the next three to five years. K.C. Hsu, Vice President of Integrated Interconnect and Packaging at TSMC, stated that the silicon photonics market is just beginning, but is expected to grow at a compound annual growth rate of 40% from 2023, reaching $500 million by 2028. Hsu mentioned that it is still difficult to determine the production schedule. Silicon photonics is seen in the industry as a key technology for a wide range of applications such as artificial intelligence, data communication, 6G, and quantum computing. Compared to traditional data transmission, optical transmission is more energy-efficient, with lower latency, helping to address the increasing heat and energy consumption issues in artificial intelligence data centers.

【Major Bank Ratings】

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