Investing.com - The Nasdaq suffered its biggest one-day slump since the August global selloff, as an Nvidia slump triggered a sea of red across stocks ahead of the slew of economic data due this week including the monthly jobs report that will shape the Federal Reserve's rate decision later this month.
At 4:00 p.m. EST (2000 GMT), the NASDAQ Composite dropped 3.3%, suffering its biggest selloff since Aug. 5. The Dow Jones Industrial Average fell 626 points, or 1.5%, the S&P 500 dropped 2.1%.
Nvidia leads tech lower
NVIDIA Corporation (NASDAQ:NVDA) fell more than 9% leading chip stocks and broader tech sector to start the new trading month. The slide comes in the wake of the chipmaker's results released last week that flagged concerns about slowing growth.
Sidestepping the meltdown, however, Super Micro Computer (NASDAQ:SMCI) rose more than 1% after announcing that it doesn't anticipate any material changes to its Q4 or FY 2024 earnings results after delaying in filing its annual Form 10-K, the company said Tuesday.
The stock fell sharply last Wednesday after the company said it delaying filing of the annual report, citing additional time to assess internal reporting controls.
Focus shifts to labor market
Investors are returning from the Labor Day holiday, to a crucial week for the U.S. markets, with a slew of labor market data including job openings data on Wednesday, the jobless claims report on Thursday and the nonfarm payrolls for August due Friday.
The previous month's labor report fell short of expectations, prompting a sharp sell-off in risk assets, and investors will be looking to August jobs report to determine whether the weakness was transitory.
Some on Wall Street believe the weakness was a the start of a decline in labor market, and will likely be reflected in the August data, persuading the Fed to deliver a larger 50 basis point hike.
"We expect a report largely similar to July will confirm that weaker July data was not a one-off but rather reflects a genuine softening in the labor market that will have officials lowering rates by 50bp to start the cutting cycle," Citi said in a recent note.
Markets are pricing in a 69% chance of a 25 basis points cut when the Fed meets on Sept. 17-18, with a 31% probability of a 50-bps cut, CME FedWatch tool showed.
Ahead of Friday's report, the U.S. ISM manufacturing survey showed that manufacturing activity more than expected into contraction territory.
United States Steel hits roadblock on sale plans; Boeing falls on Wells Fargo (NYSE:WFC) downgrade
United States Steel Corporation (NYSE:X) fell more than 6% after Vice President Kamala Harris said she was against the sale of the company to Japan’s Nippon Steel, citing a need for "strong American steel companies.”
Boeing Co (NYSE:BA) fell more than 7% after Wells Fargo downgraded the aircraft maker to underweight from equalweight on worries about peak free cash flow, which the bank expects to occur in 2027.
(Peter Nurse, Senad Karaahmetovic contributed to this article.)