Market Overview

Investing.com – The Nasdaq suffered its biggest one-day slump since the August global selloff, triggered by a drop in Nvidia shares, causing widespread losses in stocks ahead of important economic data this week, including the monthly jobs report that will influence the Federal Reserve’s rate decision later this month.

At 4:00 p.m. EST (2000 GMT), the NASDAQ Composite dropped 3.3%, marking its largest selloff since August 5. The Dow Jones Industrial Average declined 626 points, or 1.5%, while the S&P 500 fell 2.1%.

Nvidia Leads Tech Lower

NVIDIA Corporation (NASDAQ:NVDA) fell more than 9%, leading declines in chip stocks and the broader tech sector at the start of the new trading month. This decline followed the chipmaker’s results released last week, which raised concerns about slowing growth.

However, Super Micro Computer (NASDAQ:SMCI) managed to increase by more than 1% after stating it does not anticipate any significant changes to its Q4 or FY 2024 earnings results, despite delaying the filing of its annual Form 10-K.

Focus Shifts to Labor Market

Investors returning from the Labor Day holiday face a critical week for U.S. markets, featuring multiple labor market reports including job openings on Wednesday, jobless claims on Thursday, and the nonfarm payrolls for August on Friday.

Last month’s labor report disappointed expectations, leading to a sharp sell-off in risk assets. Investors will scrutinize the August jobs report to ascertain whether the previous weakness was temporary.

Some analysts believe the downturn marks the beginning of a decline in the labor market, which could be reflected in August’s data and lead the Fed to raise rates by 50 basis points. Citi expressed that a report consistent with July’s data would confirm ongoing weakness in the labor market, prompting the Fed to initiate a rate-cutting cycle. Currently, markets are pricing in a 69% chance of a 25 basis point cut at the Fed meeting on Sept. 17-18, and a 31% likelihood of a 50 basis point cut, per the CME FedWatch tool.

Ahead of Friday’s report, the U.S. ISM manufacturing survey indicated that manufacturing activity unexpectedly contracted.

Other Market Movements

United States Steel Corporation (NYSE:X) fell over 6% after Vice President Kamala Harris opposed the company’s sale to Japan’s Nippon Steel, emphasizing the need for strong American steel companies.

Boeing Co (NYSE:BA) dropped by more than 7% following a downgrade from Wells Fargo to underweight from equalweight due to concerns about peak free cash flow, expected to occur in 2027.

*(Peter Nurse, Senad Karaahmetovic contributed to this article.)