Nvidia’s market-cap loss was the largest single-day market cap loss ever for a stock, after the growth leader in AI saw its market value tumble by more than $360 billion including extended trades. This is considered an all-time record of the biggest one-day loss in market capitalization by any stock. This incident depicts the highly extreme sell-off that rattled the entire market.
Several factors led to the decline in the Tuesday, September 3 market. A report on manufacturing indicated a moderate contraction within the sector, and construction spending fell 0.3 per cent. All these economic indicators heightened investor anxiety and ignited a far-reaching sell-off.
$1 trillion wiped out from the stock market marks the largest single-day market cap loss for a stock
The S&P 500, Dow Jones Industrial Average, and Nasdaq 100 ended between 1.5% and 3.15% lower. Overall, more than $1 trillion was wiped at the close of the day, marking the largest single-day market cap loss for a stock contributing greatly to this decline.
Shockingly, shares of Nvidia went as low as a 12% drop in the trading session. The company had surged significantly because it benefited from its involvement in developing AI; it finished down 9.53% and continued to extend the loss further in after-hours trading. Other heavy-hitters, such as Apple (AAPL), saw steep pullbacks.
The rout wasn’t confined to equities as cryptocurrencies and commodities were also dragged into the rout: Bitcoin briefly sank below $56,000 and was followed lower by most major cryptocurrencies. Oil prices imploded, wiping out all its gains so far this year, while gold posted a minor decline.
It has mixed reactions from market analysts. Some call the plunge “brutal” but speculate it was partly due to temporary panic. On the other hand, some see this largest single-day market cap loss as a potential opportunity to “buy the dip”. At the same time, it takes into account how fragile the market is. This event shows yet another level of increased volatility and probably make further fluctuations in the weeks ahead.
Also, see: How to Start Investing in Stock Market with 500 Rupees in India?
