The U.S. stock market took a significant hit today, losing $1.05 trillion in market value within just 24 hours. This is one of the largest single-day losses in recent years.
Main Causes of the Decline
The decline was caused by a mix of weak economic data and poor performance from certain companies. The Dow Jones Industrial Average started the day in the red and continued to fall, losing over 626 points at the opening and ending the day at 40,936.93, which is more than a 2% drop. The main reason for the decline was disappointing manufacturing data from the Institute for Supply Management (ISM), which reported a fifth consecutive month of contraction in the sector.
Reaction of Major Indices
The S&P 500 also dropped by 2.4%, closing at around 5,530 points. The main cause here was the tech sector, which saw significant losses—Nvidia's shares plummeted by 9.5%, resulting in the largest single-day drop for any American company and wiping out $279 billion in market value. The energy sector faced difficulties as well; oil prices slipped, with U.S. crude falling to $72.66 per barrel, indicating concerns about global demand.
Impact on the Crypto Market
The Nasdaq Composite suffered the hardest hit among the three major indices, falling nearly 3.5% to close at 17,136.30. This was its worst day since August 5th. Cryptocurrencies such as Bitcoin and Ethereum showed a tendency to correlate with tech-heavy indices. Bitcoin dropped by 3%, and Ethereum fell below the $2,500 mark. Historically, September is a challenging month for both stocks and cryptocurrencies, often leading to increased volatility due to anticipated economic reports and interest rate decisions.
Despite the immediate challenges, there are factors that could lead to market recovery. Key upcoming events include the U.S. elections and the distribution of $14.5 billion to FTX creditors later this year. Analysts continue to call for calm, although some believe that if upcoming economic data doesn’t improve, the situation could worsen.
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