US stock market sees $1.05 trillion loss in a single day
The US stock market experienced a substantial loss of $1.05 trillion in market value within 24 hours on September 3, 2024, marking one of its worst single-day performances in recent years.
The downturn was primarily triggered by weak economic data and significant declines in key sectors.
The Dow Jones Industrial Average faced a steep decline, beginning the day in negative territory.
The index dropped over 626 points early in the session and continued to fall, ultimately losing more than 700 points by the afternoon.
It closed down more than 2%, settling around 40,936.93.
The losses were mainly due to disappointing manufacturing data released by the Institute for Supply Management (ISM), which reported a fifth consecutive month of contraction in the sector.
This news alarmed investors, leading to a broad sell-off as concerns about future economic difficulties grew.
The SP 500 also suffered, falling about 2.4% to close at around 5,530 points.
The downturn was particularly severe for tech stocks, with Nvidia experiencing a sharp decline of 9.5%, marking the largest single-day drop for any American company.
This drop wiped out $279 billion in market value.
The energy sector was not spared either, as oil prices fell, with US crude dropping to $72.66 per barrel.
Lower oil prices often indicate worries about global demand, which was evident in this scenario.
The Nasdaq Composite recorded the largest drop among the three major indices, falling nearly 3.5% to close at 17,136.30.
This marked its worst day since August 5.
The losses in the tech sector, coupled with broader economic concerns, contributed to this significant decline.
Cryptocurrencies, such as Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH), showed a tendency to correlate with the performance of tech-heavy indices.
Bitcoin fell by 3%, and Ethereum dropped below the $2,500 mark.
However, these declines were not solely tied to the stock market's performance.
September has historically been a challenging month for both stocks and cryptocurrencies, often characterised by heightened volatility due to the anticipation of economic reports and interest rate decisions.
Bitcoin’s market capitalisation stood at approximately $1.2 trillion, with a year-over-year return of 128%, while Ethereum's market cap was around $301.4 billion, with a 53% year-over-year return.
Despite the immediate challenges, there are factors that could potentially lead to a market recovery.
One expected catalyst is the upcoming US election, which could affect market sentiment.
Another factor is the distribution of $14.5 billion in funds to FTX creditors later in the year, which could influence market dynamics.
Amid this turbulent environment, some analysts are advising investors to remain calm.
Others, however, warn that this downturn could be a sign of more challenges ahead, especially if future economic data fails to show improvement.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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