Asian stocks experienced a significant decline on Wednesday following a sharp drop in Wall Street, with Nvidia leading the downturn by falling 9.5%, impacting chip-related stocks globally. Japan's Nikkei 225 lost 3.8%, while South Korea's Kospi and Taiwan's Taiex also saw declines of 3.0% and 4.0% respectively, with tech giants like Tokyo Electron and Samsung Electronics being affected.
Australia's S&P/ASX 200 dropped 2.1% after the country's GDP grew by 1% in comparison to the second quarter of 2023. Hong Kong's Hang Seng index and Shanghai Composite index also experienced losses of 1.1% and 0.5% respectively.
In the U.S., futures were lower as rising oil supply led to a decrease in prices. Benchmark U.S. crude fell to $69.89 a barrel, while Brent crude dropped to $73.33 a barrel. Concerns about China's economy, coupled with weak data and a real estate slump, raised doubts about future oil demand.
The S&P 500, led by Nvidia's 9.5% decline, fell 2.1%, with the Dow Jones Industrial Average dropping 626 points and the Nasdaq composite falling 3.3%. Treasury yields stumbled after a report showed U.S. manufacturing shrinking in August, reflecting challenges due to high interest rates.
Timothy Fiore, chair of the Institute for Supply Management's manufacturing business survey committee, highlighted subdued demand and companies' reluctance to invest due to monetary policy and election uncertainty. The upcoming reports on job openings, services business growth, and job creation in August will provide further insights into the economy's performance.
Overall, the S&P 500 closed at 5,528.93, the Dow at 40,936.93, and the Nasdaq composite at 17,136.30. In the bond market, the 10-year Treasury yield fell to 3.84%, down from 4.70% in late April. Currency trading saw the U.S. dollar nearly unchanged against the Japanese yen and the euro slightly up.
