U.S. stocks fell sharply on Tuesday, mirroring losses in Europe, as markets continued their sell-off ahead of Nvidia’s earnings. Investors grew increasingly cautious about stretched technology valuations and the sustainability of the artificial intelligence rally.
All three major U.S. stock indexes opened significantly lower. Gold prices climbed and U.S. Treasury yields slipped as risk appetite weakened. The S&P 500 is now heading for its fourth straight daily decline, down about 3.5% since November 12.
Nvidia’s quarterly results, due Wednesday, are expected to be a major test for the AI-driven market rally. Investors are watching closely to determine whether the technology’s momentum can continue or if enthusiasm has inflated a bubble.
Elsewhere in earnings, Home Depot projected a larger-than-expected drop in annual profit. The forecast raised new concerns about the housing market and consumer spending.
“We’re seeing a steep decline,” said Peter Tuz, president of Chase Investment Counsel. He added that traders are tense ahead of Nvidia’s results and noted that weakness may come more from Nvidia’s customers than Nvidia itself.
Economic Data Returns After Shutdown
Data delayed by the recent U.S. government shutdown is now being released. The Commerce Department reported that new orders for U.S. factory goods rose 1.4% in August. Tuz cautioned that the figures are several months old and urged investors to be patient amid conflicting economic signals.
Global Sell-Off Broadens
The Dow Jones Industrial Average dropped 552.90 points, or 1.20%, to 46,037.34. The S&P 500 fell 1.09% and the Nasdaq Composite lost 1.60%.
European markets also tumbled. German shares hit a five-month low as concerns about tech valuations and fading expectations for a December Federal Reserve rate cut weighed heavily on sentiment.
MSCI’s world index fell 1.40%, while the STOXX 600 and FTSEurofirst 300 both slipped 1.92%. Asian markets followed suit, with Japan’s Nikkei dropping more than 3%.
Meanwhile, U.S. Treasury yields declined as investors moved into safe-haven assets. The 10-year yield slipped to 4.104%, while the 2-year yield fell to 3.56%.
Currencies, Crypto and Commodities
The dollar touched a new nine-and-a-half-month high against the yen but held steady overall as valuation concerns persisted. The dollar index was flat at 99.54.
Bitcoin rebounded 1.18% to $92,886 after dipping below $90,000 earlier in the session. Ethereum also climbed, rising 3.51% to $3,112.
Oil prices edged lower, pressured by expectations of a supply surplus next year and ongoing uncertainty surrounding sanctions on Russian crude. U.S. crude slipped to $59.82 per barrel, while Brent fell to $63.97.
Gold prices reversed earlier losses, gaining 0.28% as the dollar weakened. Spot gold traded at $4,055.42 an ounce, while U.S. gold futures stood at $4,057.
