Another bout of growth fears is sweeping through the markets as the spectre of a US downturn spooks investors.
After a rough day on Wall Street yesterday, Asia-Pacific markets are a sea of red today.
Japan’s Nikkei 225 index has lost 4.2% today. South Korea’s Kospi has lost 3.4% so far, and Australia’s S&P/ASX 200 index is 1.9% lower.
Investors across Asia took their lead from New York, where the S&P 500 index fell by more than 2% yesterday and the tech-focused Nasdaq Composite shed almost 3.3%.
The trigger was a set of weak manufacturing data from the US. The Institute for Supply Management’s monthly factory survey showed that manufacturing contracted at a moderate pace in August, with new orders, production output and employment levels falling.
“Summer’s over, and the bears are back with a bang,” says Michael Brown, a senior research strategist at Pepperstone.
European markets, which fell yesterday, are set for further losses, with London’s FTSE 100 expected to drop 0.7%.
But after the Wall Street market closed, news broke that the US Department of Justice had sent a subpoena to Nvidia, as its investigation into the company deepened.
According to Bloomberg, the antitrust watchdog had previously delivered questionnaires, and has now sent legally binding requests to Nvidia. Other companies had also received subpoenas, they added.
Nvidia’s processors are currently incredibly popular with tech firms building artificial intelligence systems; DoJ officials are reportedly concerned that the chipmaker is making it harder to switch to other suppliers and penalises buyers that do not exclusively use its AI chips.
Nvidia, though, denies any wrongdoing. A spokesperson for the company said: “Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.”
The agenda • 9am BST: eurozone services PMI for August • 9.30am BST: UK services PMI for August • Noon BST: US weekly mortgage applications data • 1.30pm BST: US trade balance for July • 2.45pm BST: Bank of Canada sets interest rates • 3pm BST: JOLTS survey of US job openings • 3pm BST: US factory orders for July • 7pm: Federal Reserve publishes its Beige Book summary of economic conditions
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