Wall Street took a dive on Tuesday, particularly for chip-selling tech companies, as investors watched the major markets tumble.
The S&P 500 was down more than 2 percent and the NASDAQ Composite was down more than 3 percent – or 577 points – in a wide-ranging selloff suggesting a lack of confidence in AI and chip manufacturing heading into September. Overall, the Dow Jones Industrial Average was down 1.5 percent, or 626 points, to close the. It ended day trading at 40,936.93.
Tuesday’s drop was the largest for the big three markets since early August, according to Yahoo Finance.
Nvidia, the chip maker that saw huge investment as interest in AI technologies has grown over the last decade, saw its shares fall almost 10 percent. The PHLX chip index also dropped by 8 percent.
The chip makers led the drop after a manfuacturing index report showed August results below expectations, according to CNBC. That stoked fears of an economic slowdown and concerns about the strength of the economy, which sparked the selloff.
It wasn’t just chip makers who took a hit though; Apple’s shares also dropped by three percent, representing a $95 billion market value for the company.
The poor performance isn’t uncommon in September, according to investors.
“Sept / Oct are notoriously volatile months for markets, particularly in presidential election years. This year in particular, investors seem anecdotally even more concerned given the big swings in polls and rapidly see-sawing potential outcomes,” Carol Schleif, the Chief Investment Officer for BMO Family Office, told Yahoo Finance.
She said it was not unusual for “post Labor Day trading to start off with a push in the opposite direction to what had generally been the case in preceding summer months.” Schleif attributed the pushback to investors “hunkering down for the push to year end.”
Oil prices also took a dip on Tuesday. International oil benchmark market Brent Crude fell nearly 5 percent to below $74 per barrel by the middle of the morning. That’s its lowest price since December 2023, according to MarketWatch.
The price decrease was driven by manufacturing declines in China, which is the world’s top oil importer. China has reported manufacturing slowdowns for the last four months.