Stocks hammered by renewed growth concerns, Nvidia’s selloff

Asian shares and global stock futures tumbled on Wednesday (Sep 4), led by a heavy decline in technology names and as worries about the global growth outlook drove investors out of risky assets, while oil prices hit multi-month lows.
Stock benchmarks in Tokyo and Taipei led the slump in Asia, each falling more than 3 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan was last 1.8 per cent lower.
September has historically been a bad month for stocks, though analysts pointed to a confluence of factors behind the rout, including tepid US manufacturing data.
“Volatility obviously is picking up,” said Jason Teh, chief investment officer at Vertium Asset Management. “We had a first taste of it at the beginning of August … last night we had this macro catalyst (and) the market’s worried about further economic slowdown.”
Wall Street closed sharply lower on Tuesday after the US returned from a holiday at the start of the week, with AI darling Nvidia tumbling a record $279 billion as investors reined in their enthusiasm about artificial intelligence.
The rout spilled into tech stocks in Asia on Wednesday, with Japanese chip-testing equipment maker Advantest, a supplier to Nvidia, down 7 per cent. Taiwan’s TSMC fell more than 5 per cent, while South Korea’s SK Hynix slumped 7.7 per cent.
US stock futures meanwhile extended declines. S&P 500 futures eased 0.55 per cent, while Nasdaq futures shed 0.74 per cent.
EUROSTOXX 50 futures slid more than 1 per cent and FTSE futures declined 0.75 per cent.
“(There) was plenty of blame to go around. Nvidia. Tech. Soft spots in US data. China gloom,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank.
Recent data from China pointed to an economy that’s still struggling to mount a solid recovery, raising calls for further stimulus from Beijing.
Concerns over the sluggish outlook in China – the world’s biggest oil importer- and worries over a global slowdown have in turn further exacerbated the decline in oil prices due to expectations of weakening demand.
Brent crude futures bottomed at US$73.14 a barrel on Wednesday while US crude hit a trough of US$69.72, both their lowest levels since December. They had fallen nearly 5 per cent in the previous session.
Elsewhere, stocks in Hong Kong fell in line with their regional peers with the Hang Seng Index down 1.2 per cent.
China’s CSI300 blue-chip index lost 0.4 per cent, while Japan’s Nikkei last traded 3.86 per cent lower.
A slew of U.S. economic data is due this week, including figures on job openings, jobless claims and the closely watched nonfarm payrolls report out on Friday.
Given the Federal Reserve’s labour market focus, Friday’s release could decide whether a rate cut expected this month will be regular or super-sized.
“We reckon US growth fears are overplayed and expect a strong payrolls report on Friday,” said Alex Loo, FX and macro strategist at TD Securities.
Economists polled by Reuters expect the US economy to have added 160,000 jobs in August, a rebound from July’s 114,000 increase.
Ahead of the releases, moves in currencies and US Treasuries were less dramatic than those seen in equities, though safe-haven currencies like the dollar and the yen were buoyed by safety bids.
The yen was last 0.2 per cent higher at 145.15 per dollar, while a rebound in the greenback pushed the euro further away from a 13-month high. The common currency last bought was US$1.1057.
The Australian dollar was on the defensive, falling 0.12 per cent to US$0.67035, further pressured by weakness in commodity prices and as data on Wednesday showed Australia’s economy stuck in the slow lane last quarter.
The benchmark 10-year US Treasury yield fell nearly two basis points to 3.8253 per cent, while the two-year yield fell more than three bps to 3.8528 per cent.
In commodities, spot gold rose 0.11 per cent to US$2,495.66 an ounce.