According to the financial news app Zhitong Finance, concerns about economic growth have led to the largest sell-off in the US stock market in a month, with chip maker NVIDIA (NVDA.US) losing $279 billion in market value. Bullish investors were severely hit in early September, especially facing significant selling pressure in the technology sector.
On Wednesday, chip stocks dragged down global stock markets. Asian markets saw oil prices fall to their lowest levels since the beginning of the year, with the safe-haven currency Japanese Yen rising and Japanese stocks falling by over 3%, while stock markets in regions outside Japan dropped by nearly 2%.
Analysts and investors have expressed their views on the market trend, here are some comments:
Britney Lam, Portfolio Manager at Dubai Magellan Capital
&#34;If everyone is already pricing in the (chip) demand now, then the positions are already in place. No matter how I slice the data, expectations have been priced in. It's like being on a roller coaster, you can still go up, but the increment just slows down. Do you really want to stay at the party until 5 am?&#34;
Tai Hui, Chief Market Strategist for Asia at JP Morgan Asset Management in Hong Kong
&#34;There is no clear fundamental story behind this, which means some investors are asking a reasonable and healthy question: how fast can the entire development of artificial intelligence be monetized? How can companies monetize it in the short term?
&#34;I think this is a fair question, it lacks a clear answer, and some may think that current valuations may be too optimistic. Given tonight and Friday's ADP employment data, I suspect some investors may just be preparing for soft data.&#34;
Nick Ferres, Chief Investment Officer at Singapore-based Vantage Point Asset Management
&#34;The ISM manufacturing index has poured cold water on benign growth prospects. Despite the stock market's enthusiastic response to dovish rate prospects... a series of key leading indicators suggest that the macroeconomic situation may deteriorate further in the future. In this context, the valuation multiples of the S&amp;P 500 index, stock and credit premiums are not sufficient to compensate for risks. We are concerned that another retreat phase may occur in the coming weeks.&#34;
Jun Bei Liu, Portfolio Manager at Sydney-based Tribeca Investments
&#34;Part of investors' profits are decreasing. There is no fundamental problem in the stock market. If anything, things actually look pretty good. The Fed has already started preparing for a 25 basis point rate cut, with many more to come, the economy is slowing down but not collapsing. In the next few months, we may see profits bottoming out, presenting many good investment opportunities for investors.&#34;
Steven Leung, Executive Director of Institutional Sales at Hong Kong-based UOB KayHian
&#34;Hong Kong is quite weak, so whenever we see such negative signals from the US, Hong Kong's performance will worsen.
&#34;People think that the current situation is different from August not because of the unwinding of the yen carry trade, but because of the US economy. This is more frightening because it's not a technical issue, but a more fundamental problem.&#34;
Jason Teh, Chief Investment Officer of Sydney-based Vertium Asset Management
&#34;The question is, how fast will the economy slow down when the Federal Reserve cuts interest rates, because if they lag behind the curve, the market will continue to sell off. It's like walking a tightrope right now, as the market is trying to find answers.&#34;
&#34;When you look at NVIDIA as a market leader, despite the company's very strong profits, it hasn't been able to sustain it. There's an old saying that if the army doesn't follow the general's command, it's a warning sign... If NVIDIA, Apple, and Microsoft can't support the market, then we're entering a bear market.&#34;
Michael Arone, Chief Global Strategist at SPDR by State Street Global Advisors in Boston
&#34;We expect the market to transition from tech stocks leading to a more broad-based market leadership. This is happening because both interest rates and inflation are declining, which will help narrow the profit growth gap between the tech sector and other sectors in the market.&#34;
Sam Stovall, Chief Investment Strategist at CFRA in New York
&#34;I think investors are just succumbing to seasonal factors, fearing a double dip in September and October of an election year, so they are flocking to those stocks with hefty profits.&#34;
&#34;This may be a fleeting week, but it will be an important and critical week for investor confidence; people will continue to be nervous.&#34;
Steve Sosnick, Market Strategist at Interactive Brokers in Greenwich, Connecticut
&#34;Today, the aftermath of NVIDIA's earnings release continues, with last week's earnings being decent, once again exceeding expectations, but the magnitude of beating estimates each quarter is gradually diminishing, and investors are taking note of that.&#34;
&#34;People are concerned about the trend in job data showing seasonal factors. That's why the volatility index is high. I don't think the ISM data showing softness in manufacturing but rising prices is helpful at all.&#34;
Michael Green, Portfolio Manager at Simplify in the San Francisco Bay Area
&#34;People have been over-allocated to stocks of NVIDIA and many similar companies, and they are trying to reduce that risk. These stocks could see significant selling pressure.&#34;
Meanwhile, Goldman Sachs also expressed its view on the stock market decline. Data from Goldman Sachs' FICC &amp; Equities Trading Desk shows that while September traditionally is a weak month, there is no clear evidence of a sell-off in the stock market.
Michael Nocerino, Vice President of Sales at Goldman Sachs' Multi-Asset Platform, wrote in a report: &#34;However, there are some negative factors contrary to the bullish argument, which combined may explain today's plunge.&#34; He pointed out several reasons for this weakness:
He believes that the data is poor, with three key sub-indices of the ISM manufacturing still in contraction territory, and construction spending also showing negative growth, &#34;bad is bad.&#34;
Furthermore, liquidity is not good, with Nasdaq 100 index futures essentially at the year-to-date low. There was a reversal in the market after the close on the last Friday of the month. The S&amp;P 500 index had its third worst day of the year and has been so since July
He said, &#34;We expect to issue about $5 billion in bonds next week. After the close on Tuesday, we calculated $3.2 billion.&#34;
In addition, Commodity Trading Advisors engaged in stock futures and derivatives trading are &#34;turning to selling.&#34;
He also mentioned that the yen may not be suitable for carry trades. According to Bloomberg, T. Rowe Price's head of fixed income, Arif Husain, sounded the alarm early last year on Japanese rates, describing it as a 'financial San Andreas Fault.'
Meanwhile, with the next regulatory window expected to start on September 13, repurchases will slow down.
Investors are heavily betting on the chip sector. This is due to factors such as the remaining supply related to NVIDIA's financial report, the negative seasonality of semiconductors (lower every September since 2020), etc. There are reports that OpenAI is developing new internal chips and &#34;rebalancing the books ahead of busier micro data points.&#34; In addition, Broadcom (AVGO.US) is about to release its financial report, and Citi's global technology conference is also about to begin

US stocks experienced the largest sell-off in a month due to concerns about economic growth, with technology stocks particularly under pressure. Chip maker NVIDIA saw its market value evaporate by $279 billion. Analysts have different views on the market trend, with some believing that current stock prices already reflect the demand, while others doubt the pace of AI development and its profitability, suggesting that current valuations may be overly optimistic and warning of potential further pullbacks in the future

- Concerns about economic growth led to the largest stock sell-off in a month, with chipmaker NVIDIA (NVDA.US) losing $279 billion in market value. Tech stocks faced significant selling pressure, dragging global markets down, with Asian markets hit particularly hard. Analysts expressed varying views on the market trend, highlighting worries about AI development, manufacturing data, and the potential for further economic slowdown.
- NVIDIA's strong profits didn't prevent market turmoil, signaling broader concerns. The market shift towards broader sectors from tech is influenced by declining rates and inflation. Seasonal factors and economic data fluctuations are contributing to investor unease, with a focus on upcoming earnings reports and market liquidity.
- Despite positive earnings, concerns linger over seasonal trends and weak data, impacting market sentiment. The sell-off reflects a broader reassessment of risk exposure, particularly in tech stocks like NVIDIA. Goldman Sachs notes negative factors contributing to the market decline, emphasizing poor data performance and liquidity issues, with a cautious outlook on bond issuances and futures trading.

Tech stocks plummet again, how do analysts view it?