Stock market statistics are displayed in the window of the Nasdaq MarketSite in Times Square in New York City on August 5, 2024. Wall Street stocks deepened their losses Monday and Tokyo had its worst day in 13 years as panic spread across trading floors over fears of recession in the United States. CHARLY TRIBALLEAU/AFP via Getty Images
The seven most valuable US tech giants collectively lost approximately $1 trillion in market value earlier this week.
CNBC reported that the Nasdaq index dropped over 3%, extending a sharp three-week slide that marked its steepest decline in two years. Companies such as Nvidia, Apple, and Amazon were among the hardest hit, contributing to the staggering losses.
Nvidia experienced a notable drop, shedding more than $300 billion in market cap at the opening bell. Although it quickly recovered some ground, the chipmaker's shares closed down 6.4%, resulting in a $168 billion loss. Apple and Amazon also faced massive declines, with Apple's valuation plummeting $224 billion and Amazon's dropping $109 billion.
By the end of the trading day, Apple had lost 4.8% of its market cap, amounting to $162 billion, while Amazon saw a 4.1% decline, or $72 billion.
The broad sell-off in the tech sector was worsened by growing concerns over a potential recession, following disappointing economic data from the previous week. According to VCPost, this economic anxiety led to a 12% drop in Japan's Nikkei 225 index, marking its worst day since the Black Monday crash recorded in 1987. To add, Bitcoin's 11% decline sparked a sell-off in cryptocurrency and related stocks, further contributing to the market's downturn.
At the same time, investor sentiment has been increasingly cautious, especially with recent warnings about overinvestment in artificial intelligence (AI).
The market's focus will likely remain on whether the recent enthusiasm for AI can translate into sustained financial performance.
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