U.S. Markets Plunge as Nvidia, Bitcoin Prices Dwindle

URGENT UPDATE: The U.S. stock market is experiencing a dramatic plunge today, with the S&P 500 dropping 0.9%, pulling further away from its all-time high set late last month. The Dow Jones Industrial Average has fallen 557 points, or 1.2%, while the Nasdaq composite sank 0.8%, driven by significant losses in high-profile tech stocks, particularly Nvidia.

The latest data shows that Nvidia, a major player in the AI boom, is the heaviest weight on the market, with its stock down 1.8%. Other AI giants are also feeling the heat, including a staggering 6.4% decline for Super Micro Computer. Bitcoin, which had surged in recent months, has now fallen below $92,000, down sharply from nearly $125,000 last month. This slump has dragged down crypto-related stocks like Coinbase Global, which dropped 7.1%, and Robinhood Markets, which fell 5.3%.

Market analysts have expressed growing concerns that the U.S. stock market may be primed for a significant correction, especially given the soaring prices since April. The spotlight is now on Nvidia, which is set to report its summer profits this Wednesday. If the company’s earnings fall short of analysts’ expectations, it could challenge the high growth assumptions that have propelled the market to record levels.

Despite today’s losses, Nvidia remains up 39% year-to-date, having doubled in price in four of the last five years. However, the sentiment is shifting, with critics highlighting that the AI stock bubble may be bursting.

Adding to the volatility, Aramark shares plunged 5.2% after reporting profits that missed analysts’ expectations. The company, specializing in food and facilities management, also forecasted profit growth of 20% to 25% for the upcoming year, although this was less than what analysts had hoped for.

In contrast, Alphabet saw a rise of 3.1% after Berkshire Hathaway, led by Warren Buffett, announced a substantial stake of $4.34 billion in the tech giant. Buffett’s investment strategy typically focuses on buying stocks perceived as undervalued, which adds a layer of intrigue to the market dynamics.

As of now, the S&P 500 has dropped 61.70 points to 6,672.41, the Dow has decreased 557.24 points to 46,590.24, and the Nasdaq has fallen 192.51 points to 22,708.07.

The upcoming September jobs report, scheduled for release on Thursday, could further influence market movements. Analysts are closely watching to see if strong job figures will deter the Federal Reserve from continuing its rate cuts. Historically, lower interest rates have been favorable for stock prices, but with the current economic landscape, the Fed’s approach may shift.

Barry Bannister, chief equity strategist at Stifel, warns that the “Fed’s ‘free lunch’ is over,” indicating a potential new era for stock prices as the Fed may only cut rates in response to a slowing economy rather than preemptively.

Stay tuned as this story develops, and brace for more market reactions as key earnings reports and economic indicators emerge in the coming days.