US stock markets tumbled on Tuesday as concerns over a potential AI bubble and the overall health of the US economy rattled investors. The Dow Jones Industrial Average suffered a significant drop, losing nearly 500 points and extending a four-day losing streak.
Key Market Movers
The tech-heavy Nasdaq Composite also experienced a pullback, while the S&P 500, despite a brief rebound, closed lower for the fourth consecutive session. Bitcoin briefly fell below $90,000, erasing all of its year-to-date gains.
Nvidia's Earnings Loom Large
Investors are eagerly awaiting Nvidia's third-quarter earnings report, which is expected to provide crucial insights into the sustainability of the AI-driven market rally. Nvidia's stock price declined on Tuesday, contributing to a broader sell-off in the tech sector. Other tech giants like Amazon and Microsoft also saw their stock prices fall.
Jobs Report Delay Adds Uncertainty
Wall Street is also closely monitoring the upcoming September jobs report, which was delayed due to the US shutdown. This report will be critical in shaping expectations for the Federal Reserve's future policy decisions. Currently, traders are pricing in a roughly 50-50 chance of an interest rate cut.
Data from ADP indicated a slowdown in private sector job losses heading into November, while earnings reports from retailers are expected to provide valuable information about consumer spending.
Market Outlook
The market's current volatility reflects uncertainty surrounding the AI sector and the broader economic outlook. Investors will be closely watching upcoming economic data and corporate earnings reports to assess the potential for further market corrections.