Global Stock Market Storm Warning! Weak US Manufacturing Triggers Chip Stock Collapse, Asia-Pacific Stock Markets Follow Suit in Freefall

According to the Wisdom Finance APP, the weak performance of US manufacturing data has intensified market concerns about the world's largest economy. As a result, the overnight US stock market came under pressure, especially with chip stocks suffering heavy losses. NVIDIA's stock price plummeted by 9.5%, dragging down the entire chip sector. This decline also affected the Asia-Pacific stock markets, with a general plunge in the early trading session on Wednesday. In particular, the benchmark index of the Japanese stock market experienced its largest drop since August 5th, while the strengthening of the Japanese yen added extra pressure to exporters. The situation in the South Korean stock market was similar, with the benchmark index Kospi falling by 3% in the early trading session, marking the largest drop since the stock market crash on August 5th.

It is understood that the final values of the S&P Global Manufacturing PMI and the ISM Manufacturing Index in the US for August were lower than expected, triggering investor concerns about economic weakness. Larry Tentarelli, Chief Technical Strategist at Blue Chip Trends Report, pointed out that the market is currently very sensitive to any economic data, becoming a market highly dependent on data.

US stocks encountered setbacks on the first trading day of September, with the Dow Jones Industrial Average preliminarily falling by 1.5%, the S&P 500 Index dropping by 2.1%, the Nasdaq Composite Index falling by 3.2%, and the fear index VIX rising by 32%. The Philadelphia Semiconductor Index also plummeted by 7.7%, with chip stocks such as NVIDIA (NVDA.US) and Intel (INTC.US) leading the decline.

It is worth mentioning that NVIDIA's stock price fell by another 2% in after-hours trading, after the US Department of Justice issued subpoenas to NVIDIA and other companies to investigate whether there were violations of antitrust laws in their chip manufacturing business.

This downward trend also spread to the Japanese stock market, with the Nikkei 225 Index plunging by 4% at one point during trading, and shares of chip-related companies such as Renesas Electronics, Advantest, and Socionext dropping by over 9%. Additionally, due to the sharp drop in oil prices, the energy sector stocks were also hit, leading to a 3.4% decline in the TOPIX index.

In addition, the yen appreciated by about 1% against the US dollar, raising concerns about the profitability of Japanese exporters, especially dragging down the stock prices of companies like Hitachi and Toyota. Bank of Japan Governor Haruhiko Kuroda reiterated in a document on Tuesday that if the economy and prices perform as expected, they will continue to raise interest rates. The Bank of Japan also mentioned that despite the rate hike at the end of July, the actual interest rates are still significantly negative, and the economic environment remains accommodative.

Kuroda's remarks led to a stronger yen, impacting the Japanese stock market, which opened with a drop of over 3% on that day. Meanwhile, the South Korean stock market was also affected by concerns about the overheated artificial intelligence market, with major supplier of NVIDIA, SK Hynix, seeing a sharp drop of 9.2% in its stock price, and Samsung Electronics falling by 3.7%.

European stock index futures also saw significant declines, with the Euro Stoxx 50 index futures falling by 0.65%, the UK's FTSE 100 index futures dropping by 0.49%, and Germany's DAX index futures falling by 0.63%.

Overall, the volatility in global stock markets highlights investors' high sensitivity to economic indicators and policy adjustments, as well as concerns about the future direction of the technology industry. With inflation expectations remaining stable, the market focus has shifted to the actual health of the economy, where any signs of weakness could prompt policymakers to accelerate easing measures. Although rate cuts are usually seen as positive news for the stock market, the current situation with the Federal Reserve eager to avoid an economic downturn may not be so straightforward.

Currently, market participants widely predict that the Federal Reserve may cut interest rates by more than two percentage points in the next 12 months, which would be the largest rate cut since the 1980s, excluding periods of economic recession. Analysts Ian Lyngen and Vail Hartman from BMO Capital Markets pointed out that the recent rise in the unemployment rate has sparked market panic, and this sentiment will leave traders feeling "uneasy" ahead of the release of non-farm payroll data on Friday