Nvidia: Is a Market Crash Imminent This Time?

Nvidia’s Impact on Global Markets

Nvidia may trigger another global sell-off, just a month after the last “Black Monday,” when markets witnessed their worst day since the pandemic.
On August 5th, the Nikkei index plummeted over 12%, marking its biggest daily decline since the 2008 financial crisis.

The Tokyo Nikkei is the first major global market to open on a regular trading day, typically causing a chain reaction that reverberates worldwide.

Today, the Nikkei fell by 4.24%, the worst daily performance since early August.
The South Korean Kospi dropped by 3.15%.

In Europe, where trading just began, the overall STOXX 600 index has declined by 1.03% so far.
London’s FTSE 100 lost 0.69% in the morning hours.
The sell-off is expected to continue in the United States, following yesterday’s downturn triggered by a federal subpoena impacting chip giant Nvidia.

The S&P 500, NASDAQ Composite, and Dow Jones suffered losses of 2.12%, 3.26%, and 1.51%, respectively, in the pre-trading session.

August’s Black Monday and Investor Anxiety

September is historically a weak month for global trading, although there are tangible unusual fears of a recession.
Following the August “Black Monday,” investors have been anxious about a new and sudden sell-off.

The Federal Reserve is set to cut interest rates on September 19, potentially easing concerns.
However, Nvidia and other Big Tech companies might ignite market turmoil before this date.

Nvidia’s Stellar Rise and Recent Setbacks

For almost two years, Nvidia has experienced one of the most spectacular increases in stock market history.
Over five years, its stock price surged by 2,288% and increased by 106% year-to-date.
Briefly in June, Nvidia became the world’s most valuable company, surpassing Microsoft and Apple.

Nvidia’s rise symbolized the AI boom, attracting billions in investments towards tech giants seeking AI products.
This summer, however, quarterly earnings from Microsoft and Alphabet raised investor concerns that AI might not be as profitable as anticipated.

This realization, coupled with the Fed’s decision to delay rate cuts, triggered a market collapse in early August.

Legal Troubles and Market Fears

Yesterday, the U.S.
Justice Department slapped Nvidia with a lawsuit as part of an ongoing antitrust investigation.
This news halted the company’s meteoric rise, with its stock plunging over 10% yesterday.

Nvidia is exacerbating the already deep fears among global investors.
Its decline could be the spark that ignites a broader crisis.
A market recession two months ahead of an expected downturn in the United States could have significant political and social ramifications worldwide.

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